Airline stocks fell after Air France-KLM became the latest Continental carrier to issue a profits warning.
Shares in British Airways owner IAG were down 7 per cent as investors mulled the update, which blamed overcapacity in the European market and comes weeks after a similar jolt from Germany’s Lufthansa.
Accendo Markets’ senior trader Tom Robertson said: “The profit warning just before the busy summer months for the airlines sector has dampened investors’ sentiment. It’s a confirmation that, generally, the last three months had been difficult for the sector.”
IAG was down 25.3p at 335.9p, while EasyJet dipped 77p or 5.8 per cent to 1,248p. The pair contributed to the worst session in more than three months for the FTSE 100, which was down 85.06 points at 6,738.45.
Holiday firms were also hit, with Thomson and First Choice operator Tui Travel falling 9.1p to 380.2p, while FTSE 250 rival Thomas Cook dropped 7.4p to 126.9p.
Stockbroker Hargreaves Lansdown was another big faller after HSBC re-iterated its “underweight” rating on the firm. The shares were off 59p at 1,182p.
With the mood cautious ahead of the latest US reporting season, even pharma firm Shire was lower despite a £30bn offer from US rival AbbVie. Its shares initially climbed a little but stayed well shy of the offer price. They closed 121p lower at 4,530p as the bid was not as generous as analysts had predicted.
Marks & Spencer shares had a turbulent time after its latest trading update, initially swinging into positive territory after the figures met subdued City expectations and chief executive Marc Bolland said he was confident the firm was getting to grips with the recent website issues. However the stock closed 5.8p, lower at 427.4p, a decline of more than 1 per cent.