A solid opening across the Atlantic helped steady the London market today though the airline sector was hit by a shock profit alert from budget carrier Ryanair.
The benchmark FTSE 100 Index, which had been 0.6 per cent lower at midday, retraced its losses to close the session a modest 6.33 points or 0.1 per cent higher at 6,474.74.
The weak gains came despite more encouraging news on the UK economy, with new figures showing that the powerhouse services sector accelerated at its fastest pace for more than six years in August.
Michael Hewson, senior market analyst at CMC Markets, said: “It seems once again that markets are taking a cautious approach to proceedings as they continue to see Monday’s gains come under pressure, despite some broadly positive economic data from the UK and Europe.
“There is also the small fact that later this week we have some important US jobs data for August and this is also tempering attitudes towards taking on new risk, particularly with a Federal Reserve meeting on tapering due in mid-September.”
Traders’ attention turned to the travel sector after Ryanair’s warning over headwinds this winter, including from greater competition and the impact of Europe’s ongoing economic crisis.
British Airways parent company International Airlines Group fell 3.7p to 291p and Thomson Holidays owner TUI Travel declined 11.1p to 334.6p.
Vodafone shares continued to see-saw in the wake of Monday’s £84 billion deal to sell a 45 per cent stake in Verizon Wireless.
The heavyweight stock, which declined on Tuesday after a week of big rises, was back in positive territory, up 4.5p to 207p, making it the biggest top tier climber.
Others on the risers’ board included Costa-owner Whitbread, which added 20p to 3,138p ahead of a trading update next week.