TUI Travel led London’s blue chip share index into the red today as stocks suffered in cautious trading ahead of key forecasts from UK and US central banks.
The Thomson Holidays owner slumped 10% as it revealed consumer nerves triggered a 2% fall in UK bookings in the past three months.
Worries over the US Federal Reserve’s policy meeting later today and the Bank of England’s quarterly inflation report tomorrow also hit the wider market, with the FTSE 100 Index closing down 34.1 points to 5376.4.
America’s Dow Jones Industrial Average and the tech-laden Nasdaq were both down around 1% soon after Wall Street opened.
Asian markets had earlier reacted to a big drop in China’s July imports – a sign that the rapid expansion in the world’s third largest economy is cooling - denting mining stocks.
But concerns focused on the Fed’s statement and prospects for the world’s biggest economy after chairman Ben Bernanke said a few weeks ago that the recovery’s pace was “unusually uncertain”.
News revealing the UK trade deficit narrowed slightly in June failed to help the pound ahead of the Bank of England’s report tomorrow.
Sterling slipped 0.8% to just under 1.58 dollars, although it held firm at 1.20 euros.
Among stocks, TUI was 22.5p lower at 203.1p as the travel giant said it had more cheap holidays to give away – squeezing profits – as the World Cup and sunny weather also gave the firm headaches.
The news sent rival Thomas Cook down 7% or 14.6p to 183.9p in the FTSE 250.
TUI was joined on the way down by InterContinental Hotels, even though the Holiday Inn operator posted profits at the top end of hopes. Shares fell 46p to 1078p amid continued concerns over the slowing global economy.
International Power, which owns UK assets including the giant coal-fired station at Rugeley in Staffordshire, was another faller, down 7.4p to 372.6p after confirming its merger with French giant GDF Suez.
The new company will be 70% owned by GDF under the deal to create one of the world’s biggest independent power generators.
A host of heavyweight fallers in the mining sector also hindered progress amid worries over commodity demand following the slowdown in Chinese import growth. Vedanta Resources was the sector’s worst performer, losing 103p to 2480p.
Elsewhere, social housing firm Connaught clawed back some of its mammoth recent falls over the impact of spending cuts, warnings of huge losses and a possible debt for equity swap.
The stock saw a much-needed gain of 22%, up 2.4p to 13.4p.
Shares in bakery chain Greggs went stale with an 11.6p fall to 421.9p after saying the recent rise in wheat prices could squeeze margins, although customers are unlikely to see significant price hikes.
The biggest Footsie risers were GlaxoSmithKline up 25p at 1177p, Smiths Group up 24p to 1148p, Shire ahead 27p to 1498p and AstraZeneca up 43p at 3348p.
The biggest Footsie fallers were TUI Travel down 22.5p to 203.1p, InterContinental Hotels off 46p to 1078p, Vedanta Resources down 103p to 2480p and Carnival down 91p to 2226p.