Oil majors keep FTSE 100 afloat, turbulence hits Ryanair

A Ryanair Boeing 737-800 airplane takes off from the airport in Palma de Mallorca, Spain, July 29, 2018. — Reuters pic
A Ryanair Boeing 737-800 airplane takes off from the airport in Palma de Mallorca, Spain, July 29, 2018. — Reuters pic

LONDON, May 20 — Britain’s main share index found support from oil majors today after a signal from Opec on sticking to production cuts, while weak results from Ryanair triggered a sell-off in airlines across the board.

The FTSE 100 was slightly higher by 0830 GMT, while the mid-cap index was 0.2 per cent lower.

Providing the biggest boost to the blue-chip index were Shell and BP as oil prices touched multi-week highs after Opec indicated it would probably maintain production cuts that have helped support prices this year.

Ryanair’s London-listed stock fell 6 per cent to a four-month low after the low-cost airline reported its weakest annual profit in four years amid struggles with overcapacity, Brexit and delays in delivery of the Boeing 737 MAX.

The poor reading dragged down British Airways-owner IAG, easyJet and Wizz Air.

“Increased passenger numbers are boosting headline revenues, and optional extras like paninis and hold baggage are selling like hotcakes, but that hasn’t been enough to offset the effect of declining ticket prices on profitability,” Hargreaves Lansdown analyst Laith Khalaf said.

Utilities National Grid and Centrica were among top gainers after being hammered last week when the opposition Labour Party announced plans to take energy networks back into state ownership if elected.

However, concerns about the possible escalation of the US-China trade conflict hung in the air after Google suspended some business with Huawei.

Among midcaps, a stand-out faller was Madame Tussauds-owner Merlin Entertainments which slipped 5.2 per cent and was on course for its biggest one-day fall in two months after a double downgrade by HSBC.

Small-cap Low & Bonar tumbled 26 per cent to a record low after the polymer products maker announced CEO departure and cut full-year targets due to a hit to sales from the US-China trade war. — Reuters

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