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UK Equities
Travel stocks check in at top of FTSE 100
From the Financial Times of Thu, 04 Dec 2014 09:30:21 GMT

A combination of the outlook for lower fuel prices and more upbeat results sent travel stocks to the top of the FTSE 100 on Thursday.

EasyJet, the London blue-chip index’s low-fare carrier, made the best single gain in initial trade after upbeat numbers from its Irish rival Ryanair, which reported a 22 per cent rise in traffic in November and lifted its profit guidance for the full-year. EasyJet’s stock rose 4.8 per cent to £17.45, taking its rally over the past three months to 25 per cent.

Ryanair itself rose 10 per cent to €6.95, its best ever level, and top place on the international FTSE Eurofirst 300. IAG, the parent of British Airways and Iberia of Spain, gained 1.8 per cent to 474.3p.

Tour operator Tui Travel also reported well-received numbers ahead of its all-stock, nil-premium merger with German namesake Tui AG later in the month. Underlying profits at constant currencies rose 11 per cent, beating guidance for growth of 9 per cent. The shares gained 3.1 per cent to 441.9p.

Wider travel stocks were also higher as traders read across from the news. InterContinental Hotels was 1.8 per cent higher at 474.3p. Carnival, the cruise operator, added 1.3 per cent to £27.57.

Unilever’s stock climbed 2.9 per cent to £27.54 after the consumer goods maker confirmed plans to separate its spreads business into a separate unit, a move that could lead to a sale of the maker of Flora and Bertolli margarines.

Overall, mining stocks held the FTSE 100 back as the heavily weighted sector tracked the stubborn weakness in metals prices.

BHP Billiton made the biggest single loss of the morning, down 1.8 per cent at £14.91. There were six metals producers on the list of the index’s 10 biggest fallers as it ticked 0.1 per cent lower to 6,708.58.

Investors across Europe were waiting for the outcome of the European Central Bank’s monetary policy meeting, due at 12.45pm. While the ECB looked unlikely to announce any fresh policy action, there remained hopes that at the subsequent press conference, Mario Draghi, its president, could signal deeper support for more stimulus measures.

“Despite significant opposition from within the ECB to Mario Draghi’s proposal for widespread asset purchases, the market is confident that he will eventually be able to deliver his plan to support European growth and avoid deflation,” said Rebecca O’Keeffe, head of investment at Interactive Investor.

“However, if the market starts to see any signs that he won’t be able to generate the required support then market reaction could be swift and severe.”

The Bank of England’s monetary policy meeting was scheduled to end at midday, with the UK central bank not expected to make any policy change.



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