BRITISH AIRWAYS remained a surprise fixture on the FTSE 100’s leader board yesterday after another attack on Iraq’s oil pipelines boosted crude prices.
The UK flag carrier, whose jet fuel prices are tied to the cost of oil, closed just off its intra-day highs, even after explosions ripped through two pipelines in southern Iraq.
Analysts said reports that a €752 million (£499 million) rights issue by Lufthansa was almost fully subscribed led to a slipstream effect, boosting confidence that the airline industry was in a recovery phase. BA was also rumoured to be considering a fundraising. Its shares gained 7¼p to 258¾p, making it the third biggest riser on the FTSE 100.
Tame US inflation data and stronger than expected consumer confidence figures also gave a lift to the FTSE 100, which closed 25.4 points higher at 4,458.6.
Mortgage banks provided a modest brake on the rally, after Monday night’s hawkish comments on the risky property market by Mervyn King, the Bank of England Governor.
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HBOS was worst hit, falling 7p to 707p, while Bradford & Bingley shed 1¾p to 278½p and Barclays lost 2¼p to 482¼p. Abbey National, down 3p to 475¾p, was also hurt by a “sell” advice by SG Securities.
William Hill led the FTSE 100 risers with a 16¼p gain to 536¼p as shares in the bookmaker bounced back from Monday’s worries about the reform of UK gambling laws.
Along with the casino operators Rank and Stanley Leisure, William Hill fell sharply on Monday after the Government issued a more restrictive than expected response to the Parliamentary Joint Committee’s draft gambling legislation.
But Citigroup Smith Barney said yesterday that it saw no impact on bookmakers and repeated its “buy” recommendation on William Hill. Stanley Leisure and Rank picked up after Monday’s heavy losses, rising 1p to 447p and 6p to 291½p respectively.
Whitbread gained 7p to 823½p on an upbeat trading update. The pub operator said that total group sales were up 3.5 per cent, while like-for-like sales growth was up 3.4 per cent.
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Daily Mail & General Trust gained 6p to 684p on hopes that the publishing group may be pipped at the post in its bid for The Daily Telegraph newspaper. Daily Mail and CVC, the private equity firm have submitted a joint bid of between £600 million and £625 million, and have reportedly refused to raise their offer despite being told they have been outbid. GWR, the commercial radio group in which Daily Mail has a 29 per cent stake, meanwhile slipped ¾p to 249p.
Rentokil, the pest control to facilities management group, was the second biggest faller on the FTSE 100, slumping 2p to 145p as Dresdner Kleinwort Wasserstein poured cold water on recent bid speculation.