Egyptian chaos hits UK travel firms

Travel companies slumped into the red yesterday as fears over political unrest in Egypt and rising oil prices which hit $100 a barrel dragged the Footsie down.

Thomson-owner TUI Travel, Thomas Cook and British Airways-parent International Consolidated Airlines Group were among those under pressure on the London market as flights were delayed and holidays cancelled.

Concerns over the affect of Egypt's woes on oil supplies also sent the wider FTSE 100 Index into the red, down 18.43 points to 5,862.94, a drop of 0.3 per cent. The price of Brent crude hit $100 a barrel for the first time since 2008 as markets fretted over the flow of oil being disrupted on key routes through Egypt. David Hunter, an analyst at Dunfermline-based consultancy M&C Energy, said: "The Brent crude oil price has been inching towards the $100-a-barrel level for weeks now.

"All traders needed was a specific reason, and the spreading of North African political unrest towards the Middle East has been the catalyst."

But a better session on Wall Street helped pare back earlier losses in London thanks to better-than-expected profits from US oil giant Exxon and news of a jump in US consumer spending.

Other markets across Europe also narrowed losses, with the Cac 40 in France scraping into the black by the close and Germany's Dax only off 0.4 per cent.

The dollar has strengthened in recent days as traders sought refuge in traditional safe haven currencies, but eased back yesterday after investors in America returned to US stocks thanks to cheerier economic and corporate news. The pound was up 1.3 per cent to more than $1.60 and rose 0.3 per cent to €1.17.

Heavyweight banks such as Barclays and Royal Bank of Scotland were shaken on the FTSE 100 by the uncertainty. Barclays was down 4.5p at 293.8p, a drop of more than 1 per cent, while RBS fell 1p to 41.7p.

With Thomson-owner TUI Travel cancelling flights to the Egyptian city of Luxor, shares in the blue chip company dropped 6.8p to 253p. Newly-merged BA and Iberia parent IAG fell 4.6p to 256.4p, while InterContinental Hotels slipped 14p to 1,315p. FTSE 250 tour operator Thomas Cook shed 6p to 190.6p.

RSA Insurance - which owns the More Than brand - gained ground as takeover talk suggested bigger rival Aviva was considering a 7 billion bid.Although some analysts remained sceptical of a deal, RSA shares rose 0.6p to 135.9p while Aviva fell 7.4p to 422.8p.

Greene King - which owns the Belhaven brewery in Dunbar - topped the FTSE 250 Index risers board after it became the latest pubs group to reveal resilient trading over the festive period.

The group, which saw shares rise 5 per cent or 23.7p to 472.2p, forecast more profitable growth over the rest of the financial year and announced the 55.8 million acquisition of carvery pub restaurant business Cloverleaf.

Frontier IP - the Edinburgh-based company that commercialises technology created at Dundee and Robert Gordon universities - ended its first day on Aim at 60p, having issued its shares at 50p each.

Sigma Capital, out of which Frontier IP was spun, was unchanged at 9.5p.