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Market rises despite woes for travel companies

IAG, the company behind British Airways, was the worst performer on the FTSE 100 for the second day running.


IAG was among the biggest fallers on the FTSE 100 on Wednesday (PA)

IAG was among the biggest fallers on the FTSE 100 on Wednesday (PA)

IAG was among the biggest fallers on the FTSE 100 on Wednesday (PA)

London’s top index was treading water on Wednesday, but ended slightly in the green despite a second bruising session for the owner of British Airways.

IAG faced its second day as the biggest loser on the FTSE 100 after the decision by Morocco to ban UK travellers added to Tuesday’s woes over rising passenger fares at Heathrow.

“At the beginning of September, a wave of optimism broke over the travel sector as the prospect of the lifting of restrictions on overseas travel came into focus, which in turn prompted some decent gains for airlines,” said Michael Hewson, chief market analyst at CMC Markets.

“This light at the end of the tunnel for airlines was welcome news for the beleaguered travel sector given how it has borne the brunt of various lockdown restrictions.

“Unfortunately for the airlines, the light at the end of the tunnel has turned out to be the train of rising fuel costs, higher airport charges, and the prospect of further Covid restrictions coming in the other direction, with the likes of IAG, easyJet, Lufthansa and TUI unable to catch a break, with TUI dropping to its lowest levels this year.”

He added: “It’s hard to think of a bigger own-goal than Heathrow Airport hiking their charges by 56% at the very time that fuel prices are surging, and infection rates are on the rise again.

“Gatwick and other regional airports must be rubbing their hands.”

The FTSE closed up 5.67 points to 7,223, a rise of less than 0.1%

But it was a quiet day for the index. The lowest it got was just around 30 points behind its highest point.

Nor was there much movement in Frankfurt where the Dax closed up 0.1%.

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In Paris things looked different, the Cac 40 closed up 0.5%, closer to the US markets. The Dow Jones and S&P 500 were both trading up around 0.4% when markets closed in Europe.

Sterling was trading flat, and by the end of the day, one pound would buy 1.3818 dollars or 1.1865 euros.

In company news, Metro Bank saw its shares dip 5.4% after revealing that lending was down 18% in the third quarter, compared to the same period a year earlier.

Because it sold its residential mortgage book to NatWest, the company did not manage to cash in on the mortgage boom enjoyed by the rest of the sector as stamp duty was slashed during the pandemic.

Deliveroo’s shares went in the opposite direction, rising 3.7% after revealing that its sales growth had survived the reopening of restaurants in recent months.

In the most recent quarter, the food delivery platform said that its gross transaction value (GTV) – a measure it likes to track – rose 56% in the UK and Ireland.

The biggest risers on the FTSE 100 were Vodafone, up 2.6p to 112p, Burberry, up 42.5p to 1,872.5p, SSE, up 33p to 1,621p, Auto Trader, up 12.2p to 607.2p, and Kingfisher, up 6.2p to 336.6p.

The biggest fallers on the FTSE 100 were IAG, down 8p to 157.5p, United Utilities, down 17p to 485.2p, Rio Tinto, down 165p to 4,885.5p, Land Securities, down 20p to 678.2p, and Whitbread, down 95p to 3,195p.

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