A dip in the oil price after its recent gains gave a lift to transport groups on hopes of cheaper fuel costs.
With oil stocks in Europe rising last week, Brent crude slipped 2.2% to $66.26, pushing BP 16.2p lower to 457.10p and Royal Dutch Shell down 53.5p to £20.68.
But cruise operator Carnival climbed 108p to £30.11, while British Airways owner International Airlines Group added 17p to 562p. EasyJet rose 48p to £18.21 after it announced a 3.8% year on year rise in passenger numbers for April, despite 602 flights being cancelled due to a French air traffic controllers strike.
Overall it was a volatile day for the markets.
German bond prices were crashing in early trade as the euro rose and oil moved higher before its later decline. That, along with Federal Reserve chair Janet Yellen’s comments that equity valuations were “quite high” sent global markets sharply lower.
In the UK there were also jitters as voters went to the polls in one of the closest general elections in decades.
But shares came off their worst levels as German bunds and oil reversed their movements. So the FTSE 100 finished down 46.79 points at 6886.95 having earlier fallen as low as 6810,05.
The revival of fortunes was helped by better than expected weekly US jobs claims, ahead of Friday’s non-farm payroll numbers, which saw the Dow Jones Industrial Average climb 70 points by the time London closed.
Tony Cross, market analyst at Trustnet Direct said:
It has been a day of jitters for the FTSE 100, but attempting to pin too much inference on the potential uncertain outcome of today’s General Election still looks a little ambitious. Yes it may be playing a role, but against the broader geopolitical backdrop it’s little more than a sideshow with notable losses across the continent also being pared during the day.
Insurers were in demand, with RSA Insurance up 9.3p to 427.3p and Aviva adding 13.5p to 527p after their latest updates. Legal & General rose 2.9p to 262p and Standard Life was 4.9p better at 466.1p.
On the speculative front, SABMiller jumped 124.5p to £35.31 on revived talk of a possible bid from Anheuser-Busch Inbev, Warren Buffett and investment group 3G Capital.
But Morrisons lost 12.4p to 176.9p after another disappointing sales performance although 9.62p of the fall was due to the shares going ex-dividend.
Tesco slipped 3.1p to 223.7p as Shore Capital suggested a fundraising was probably needed at some point. Analyst Clive Black said:
Tesco has firmly entered a period of operational focus and balance sheet de-leveraging that will occupy management time for the next few years...The 2015 preliminary results were a threshold of sorts, dominated by the major asset write-downs (£3.8bn) and the eye-watering statutory losses (£6.4bn). Looking ahead, two strategies come together as management believe that cost reduction and working capital provide levers to reduce debt; supply chain benefits could be very substantial and are not yet articulated. However, even so and with a dunn humby ‘event’ to come and greater visibility on pensions, it is hard not rule out a capital raising in the short-to-medium term. On fulsome recovery multiples we believe that non- dividend paying Tesco stock merits a hold rating.
Apart from Morrisons, a number of other companies also went ex-dividend with G4S down 5.6p at 285.4p and Admiral 1.8% lower at £14.96.
Among the mid-caps Telecity jumped nearly 22% to £10.95 after the data centre group opened talks with US business Equinix about a £2.3bn takeover, casting doubt on Telecity’s proposed deal to buy Interxion Holdings.
Ladbrokes lost 0.3p to 105.6p after more boardroom change at the bookmaker. Chairman Peter Erskine said he would step down this year, following the arrival in March of new chief executive Jim Mullen to replace Richard Glynn.
