Trade jitters drag UK shares, turbulence hits Ryanair

People walk through the lobby of the London Stock Exchange in London. ― Reuters pic
People walk through the lobby of the London Stock Exchange in London. ― Reuters pic

LONDON, May 21 ― Britain's main share index slipped again yesterday as worries over international trade increased on the back of US curbs on China's Huawei, while weak results from Ryanair triggered a sell-off in airlines across the board.

The FTSE 100 gave up 0.5 per cent and the mid-cap index was 0.8 per cent lower.

The indexes, however, fared better than their European peers whose chipmakers were hit as sentiment were grim in the wake of the crackdown on Huawei.

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

“Seeing as the US have taken a tough stance against Huawei, traders are not hopeful that the US-China trade dispute will be resolved quickly,” CMC Markets analyst David Madden.

“While the US-China trade situation remains in limbo, sentiment is likely to be poor.”

Asia-facing stocks including HSBC and Prudential were among the biggest drags on the main index.

In news-driven moves, Coca-Cola HBC AG, which was seen as a potential buyer for CCBA, slumped nearly 7 per cent after NYSE-listed Coca-Cola Co dropped plans to refranchise its Africa bottling business CCBA.

Ryanair's London-listed stock fell about 5 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.

Among midcaps, a stand-out faller was Madame Tussauds-owner Merlin Entertainments which slipped 7 per cent on its worst day since last October after a double downgrade by HSBC.

Small-cap Low & Bonar tumbled 24.5 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.

Real estate agent Foxtons lost 4.7 per cent after it said its CFO was leaving the company and that UK property sales were running at record lows due to the impact of Brexit on consumer confidence. ― Reuters

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