Since the government revealed plans for its state-run train ticketing app this year, Trainline’s dominance in selling fares online has become more uncertain.
The shares have not recovered since losing a quarter of their value in May when the plans were launched. They fell another 17½p, or 6.4 per cent, to 256p yesterday as one of the group’s former cheerleaders downgraded their expectations on the stock again. That said, investors are approaching all travel-related stocks with more caution since the government’s plan B announcement.
Stifel, the American brokerage, believes the main driver over the next few years will be the UK’s changing systems as the market waits for Great British Railways to show its hand. The Stifel analysts said that the introduction of GBR could lead to two scenarios. The first is that Trainline goes head to head with the new app; the second is that Trainline’s technology ends up powering its rival.
Neither option left the analysts brimming with confidence. Mounting uncertainty led to them trimming their target price on the stock from 345p to 315p.
Trainline wasn’t the only travel-related stock stuck in the red as the sector endured a bruising session amid uncertainty over the Covid-19 Omicron variant. IAG, the parent company of British Airways, fell 7p, or 5.2 per cent, to 130¼p. Rolls-Royce, the engine maker, shed 5¾p, or 4.8 per cent, to 117p and EasyJet declined 21¾p, or 4.2 per cent, to 503¾p. Wizz Air lost 180p, or 4.2 per cent, to £41.13 after analysts at HSBC swapped their “hold” rating to “reduce” due to the company’s “deteriorating competitive position” in its key markets.
Advertisement
Hotel groups were also hit as Whitbread, the Premier Inn owner, fell 101p, or 3.5 per cent, to £27.97 and Intercontinental Hotels Group shed 153p, or 3.3 per cent, to £44.89.
Investors lost their appetite for JD Wetherspoon after the pub group’s boss Tim Martin warned of a profit hit amid Covid-19 restrictions. The shares fell 47p, or 5.4 per cent, to 820p. SSP, which has 2,700 railway, airport and motorway sites in 35 countries, shed 11½p, or 4.9 per cent, to 223p.
The FTSE 100 erased early gains, dropping 60.34 points, or 0.8 per cent, to 7,231.44. The more domestically focused FTSE 250 fell 280.49 points, or 1.2 per cent, to 22,647.22.
The heaviest faller among the UK’s largest 250 companies was Capita, which fell 8½p, or 18.7 per cent, to 36¾p after the outsourcing group warned that Covid-19 had continued to affect a number of its businesses.
Shares in IWG, the serviced office provider, followed as the reintroduction of the government’s work-from-home mandate dampened sentiment in the City. The shares fell 17½p, or 6.3 per cent, to 258¾p.
Advertisement
Jupiter Fund Management enjoyed its best single-day rally since April after reports that the manager had hired Robey Warshaw to strengthen its defences against a potential takeover. The shares rose 16¾p, or 7.2 per cent, to 250½p.
When Watches of Switzerland revealed its interim results last week, analysts at Bank of America thought it highlighted how the retailer’s equity story was very different from at its initial public offering in 2019. “We believe Watches of Switzerland is in the nascent phase of its development, despite being a longstanding market leader in the UK,” Daria Nasledysheva, an analyst at the bank, said. She and her team reckoned the group’s “strong growth potential” merited an upgrade to a “buy” recommendation and a price target of £20. The shares ticked up 38p, or 2.7 per cent, to £14.54.
Bitcoin rollercoaster takes dip
Bitcoin has briefly fallen below a closely monitored price level as the latest sell-off of the world’s largest cryptocurrency continues (Callum Jones writes).
The digital coin hit a high of almost $69,000 a month ago but has since fallen back by about a third.
Advertisement
Yesterday it dropped below its average level for the past 200 days, of $46,720. It later regained ground and by the evening was trading down 6.5 per cent at $47.013.29.
Marc Chandler, chief market strategist at the trader Bannockburn Global Forex, told Bloomberg: “The idea that, as it matured, the volatility would ease has not really materialised. The volatility is deadly and its other supposed attributes, like a hedge against inflation, seems spurious.”
Bitcoin was created in 2008 as strings of computer code with no physical form. While intended as an alternative means of payment for goods and services, its main use so far has been in speculative trading.
Its proponents argue this is on the verge of changing. This year their hopes have been bolstered by signs of widespread acceptance on Wall Street but also tested by concerns over its environmental impact.
Wall Street report
Advertisement
Indices retreated amid fears over the spread of the Omicron variant and ahead of the Federal Reserve’s two-day policy meeting which starts today. The Dow Jones industrial average fell 320.04 points, or 0.9 per cent, to close at 35,650.95.
