August 9, 2008
City Market Report
A FURTHER sharp slide in oil prices helped power the London market to a positive close yesterday as travel firms and airlines soared on the lower cost of crude.
Oil slipping below EUR114 a barrel at one stage boosted blue chips in late session trading, leaving the FTSE 100 Index 11.7 points higher at 5489.2.NatWest parent Royal Bank of Scotland rose 7.5p to 240.5p after fears of pounds 1bn-plus losses were not realised in its interim results.
It reported a half-year deficit of pounds 691m and said it was comfortable with its balance sheet position.
The rest of the sector was mixed, with Barclays off 8.5p to 366.5p after its own results on Thursday, while HBOS fell 2.5p to 332.25p, Lloyds TSB fell 0.75p to 318p and HSBC climbed 16p to 858.5p.
But it was travel firms and airlines that stole the show, with the sight of oil prices below EUR114 pushing Thomas Cook and British Airways to the top of the risers board with gains of more than 7%, up 17p at 237.25p and 20.75p to 275.75p respectively. TUI Travel lifted 17p to 237.5p.
Lower metal prices amid expectations of weaker economy activity meant miners dominated the fallers board, with Kazakhmys the biggest FTSE 100 loser, off 6% or 86p to 1248p.
BG Group bucked the downward commodities trend for a while after announcing a further crude oil discovery off the coast of Brazil.
But excitement over BG's sixth success at the deep-water Santos basin started to fade and shares lost their earlier 2%gain to stand 16p lower at 1090p.
Meanwhile, Vodafone managed to shrug off a broker downgrade to neutral from buy. Goldman Sachs said it was concerned about weaker revenue growth in Europe, but Vodafone closed up 0.95p at 140.3p.
Anupgrade from Goldman for Marks & Spencer supplier Northern Foods caused the company's share price to lift 9% or 4.75p to 60p.
HSamuel and Ernest Jones jeweller Signet, also in the FTSE 250, enjoyed a second day of gains after an upgrade from Dresdner Kleinwort following reassurance over US margins. Shares rose 7%, or 4p, to 59.25p.
The biggest Footsie risers were British Airways up 20.75p at 275.75p, Thomas Cook ahead 17p at 237.25p, TUI Travel up 17p at 237.5p and Schroders up 64p at 1070p.
The biggest Footsie fallers were Kazakhmys down 86p at 1248p, Ferrexpo off 15.75p at 260.25p, Vedanta Resources down 91p at 1765p and Xstrata down 154p at 2990p.
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