FTSE finishes firmer as flu fears fuel pharmas
Fears the 'swine flu' outbreak could hamper any economic recovery hit travel and tourism shares, but pharmas rallied on vaccine potential
The FTSE 100 index closed just six points off its intraday high, 17.1 points or 0.4% higher at 4,173.1, having dropped to a session low of 4,088.7 earlier in the day. The FTSE 250 index was not so lucky, however, sliding 93.1 points of 1.3% to 7,276.7.
Continuing to dominate the headlines today was the threat of a ‘swine flu’ pandemic as the H1N1 virus, which has already killed more than 100 people in Mexico, spread to the US and Canada and further suspected cases popped up in Europe, Israel and New Zealand.
Although fears over the impact on economic productivity if nations’ workforces opt to remain at home weighed on indices across Europe, and travel and tourism stocks tumbled lower as governments issued travel warnings, the pharmaceuticals sector was thoroughly enjoying the prospects of a boost to vaccine businesses.
GlaxoSmithKline was the top-performing blue-chip stock, have rallied 5.7% higher to 1,063p, with AstraZeneca 3.7% ahead at 2,483p and Shire up 1.8% at 890.5p. Glaxo currently markets one of only two approved drugs for the treatment of influenza and is could benefit further as the search for a vaccine gets under way. Click here to read more on how the deadly flu outbreak is affecting different sectors.
Travel and tourism stocks suffered a global sell-off, with national air carrier British Airways leading the blue-chip casualties lower, down 7.8% at 151.2p, following by cruise operator Carnival, off 6.8% at 1,807p, holiday operator Thomas Cook Group, 4.4% weaker at 270.25p, and hotelier InterContinental Hotels, 4.2% behind at 643.5p. On the second tier, mid-cap no frills airline easyJet fell back 4.5% to 320.25p and meat producer Cranswick slipped 4.4% to 612p, despite ‘swine flu’ not being contractible through the consumption of pork.
Elsewhere, 3i Group was the main faller on the FTSE 250, having plummeted 14.5% to 318p after confirming it is looking to raise capital. The announcement came on the back of press reports over the weekend that the private equity firm is mulling a £500-£700 million rights issue.
At the other end of the spectrum, mid-cap Fidessa surged 11.8% higher to 1,073p after saying it has had a good start to the year and could even report growth for 2009.
Returning to the top line, trading volumes on the FTSE 100 index were low as investors remained on the sidelines, awaiting indications of how widespread and long-lasting the outbreak of this particular flu strain is likely to be.
You can now receive this market commentary, and all the latest equity commentary, funds research, and general investing articles direct to your inbox via our new Daily Newsletter.
