Irish building supplies groups CRH offset a drop in airlines after Ryanair warned on its profit outlook to push the FTSE index higher yesterday.
Shares in CRH, one of the top gainers in the FTSE 100 index , rose 7.2 per cent after the company said it had agreed to pay €6.5bn (£4.9bn) for assets that Lafarge and Holcim need to sell to secure regulatory approval for their planned merger.
CRH, the leading producer of asphalt for road building in the US, said the deal would expand its reach and make it the largest building supplier in central and eastern Europe.
“CRH has a history of acquisition and successfully integrating businesses into its operations. This deal will be large, adding 26 percent to our expected sales figure for 2014,” Cantor Fitzgerald analyst Ian Osburn said.
The FTSE 100 index closed up 33.15 points yesterday, or 0.5 per cent at 6,782.55 points, after closing 0.9 per cent lower on Friday.
Budget airlines came under pressure after Ryanair, Europe’s largest airline by passenger numbers, said profit growth would be modest next year as low oil prices helped rivals step up competition.
The low-cost carrier fell 6.1 per cent, despite again raising its profit forecast. It said it would benefit only slightly from lower jet fuel costs this year because it has hedged 90 per cent of its fuel needs at $92 per barrel up until March 2016.
While Ryanair is not a FTSE 100 member, airlines EasyJet and IAG were the top fallers on the index, losing 6.4 per cent and 2.8 per cent, respectively.
“Ryanair has always had particular difficulty hedging its oil. It’s very difficult to hedge when you’re not sure where the bottom is, but I think other airlines are in the same boat,” said Brenda Kelly at IG.
Oil volatility hit energy stocks again in yesterday’s trading, with the sector up 3.3 per cent, following an eight per cent jump in oil on Friday on a record weekly drop in US oil drilling. They reversed an early fall to gain yesterday.
Tullow Oil surged 9.3 per cent, set for its biggest rise since 2011 to become the top FTSE 100 gainer, but remains down more than 50 per cent since last June.
Oil firm Afren closed nearly 90 per cent higher in strong volume after lenders agreed to defer a $50m amortisation payment by a month, saying it would also delay the payment of a $15m bond coupon by a month.