German parent pulls out of TUI bid

PACKAGE holiday provider TUI Travel was the biggest faller on the Footsie yesterday after its German parent company abandoned plans to merge with its British subsidiary to cut costs.

Hanover-based TUI sparked a rise in TUI Travel’s share price last week after floating the idea of the deal, which would have been structured as a reverse takeover. But the German group said yesterday that the TUI Travel’s current share price made the deal unattractive.

The British stock, which owns the First Choice and Thomson chains, fell 4.8 per cent, or 14.1p, to close at 278p, while the wider FTSE 100 index climbed 18.47 to hit 6,197.64, having touched 6,200.49 earlier in the session.

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The blue-chip index hit its highest level since March 2008 thanks to American technology giants Google and IBM beating analysts’ profit estimates.

Atif Latif, director of trading at Guardian Stockbrokers, said: “As we are now holding above some key levels on the FTSE 100 – namely 6,105 and 6,150 – we 
see continual upside from the market from here.

“Earnings have once again beaten expectations and forward-looking estimates remain at elevated levels alongside better economic data. From experience, we do expect this uptrend to remain intact over the short term and break above some ­recent highs.”

Further vague takeover chatter surrounding Marks & Spencer following disappointing Christmas sales pushed the high street retailer up 9.4p or 2.5 per cent to 379.1p

Analysts at JPMorgan Cazenove cut their ratings across the house-building sector, forcing Redrow down 4.3 per cent to 184p and both Barratt Developments and Taylor Wimpey down 3.6 per cent to 218.4p and 70.65p respectively.

NEW YORK: Leading US stocks gained ground in early trading following some ­upbeat corporate earning ­reports ­released after the bell on ­Tuesday.

The main Dow Jones index was up 0.5 per cent, at 13,779.17.

IBM led the way, rising 5.9 per cent after the computer maker posted better-than-expected profits late on Tuesday. Technology giant Microsoft was up 
1.3 per cent. On the negative side, plane-maker Boeing was down 0.5 per cent.