THURSDAY MARKET CLOSE: Poor US data sends rally into reverse

The benchmark FTSE 100 retreated from its recent move towards an all-time high amid nervousness over airline stocks and disappointing economic data from the US and Europe.

The index fell 37.6 points or 0.6 per cent to 6,840.89 after figures showed America’s industrial production fell in April. Sentiment was also hit by GDP figures from Europe.

Lee Mumford, financials trader at Spreadex, said: “Global markets took to the downside after a mix of economic data sent nerves through the markets.”

EasyJet suffered a 7 per cent fall after a broker note from RBC Capital warned that the World Cup posed a “stay at home risk” to the low-cost carrier over the crucial summer period. Shares fell 112p to 1,550p, while British Airways owner IAG was off 6 per cent or 23.2p to 365.7p.

Supermarkets did well after American-owned Asda announced it had narrowly returned to sales growth. Morrisons added 8.9p to 205.2p, while Tesco rose 6.2p to 302.6p and Sainsbury’s climbed 5.1p to 332.8p.

In the FTSE 250, Carphone Warehouse and Dixons were given short shrift by investors after unveiling details of their proposed tie-up.

Both companies found themselves under heavy selling pressure as the merger of equals had been widely anticipated and raised fears over the challenge of combining the two operations.

Their combined value sank from £3.7 billion at the start of trading to £3.4bn, with Currys and PC World owner Dixons off 10 per cent, or 5.2p, to 45.7p and Carphone Warehouse down 8 per cent, or 26.5p to 301.3p.

Holidays firm Thomas Cook was the biggest faller in the second tier, even though it cut its first-half losses in the first six months of the year. Its shares fell nearly 13 per cent to 156.1p after it revealed the impact of Egypt’s political turmoil on holidays.