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Markets

Drop in airlines dampens FTSE 100 after Spain attack

Published Updated

LONDON: Britain's top share index came under pressure from falls among consumer giants, financials and airline stocks, caught up in a broader risk-off move following the attack in Spain.

The FTSE 100 index ended the session down 0.9 percent at 7,323.98 points, extending the previous session's losses after three days of gains. It still managed to end the week with a small gain, however.

A suspected Islamist militant drove a van into crowds in Barcelona on Thursday, killing 13 people and injuring more than 100.

Shares in International Consolidated Airlines, which operates British Airways, and easyJet fell 2 percent and 0.8 percent, recovering earlier losses slightly as the broader European travel & leisure sector dropped 1.5 percent.

"The entire airline and leisure industry is down today purely from the attacks," said John Moore, trader at Berkeley Capital.

"People in the forthcoming months, we believe, will be less likely to take trips abroad," he said, adding that he expected the airline stocks to recover.

Randgold Resources led the 10 or so risers, up 1.2 percent as investors sought safety in assets such as precious metals miners and the price of gold rose for the third day straight on the back of political turmoil in the United States.

Falls among large consumer staples firms such as British American Tobacco and Diageo were the biggest weights on the FTSE 100, while financials also added pressure with HSBC, Lloyds and Barclays edging lower.

Energy stocks took 6.6 points off the index, with BP declining 0.7 percent as the price of oil fell.

British mid caps were also 0.7 percent lower, with Hikma among the biggest fallers, extending losses into a second day after trimming its sales forecasts on Thursday.

The health care firm has fallen around 15.5 percent over the past two sessions, and broker HSBC cut its target price on the stock.

"Management also repeatedly stated that pricing is cyclical, the industry has been here before and that it will recover. We disagree," analysts at HSBC said in a note, adding that they expect US drug pricing to remain under increasing pressure through the second half of 2017 and onwards.

 

 

Copyright Reuters, 2017

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