BRITAIN’S top equity index bounced back from five-and-a-half month lows yesterday, lifted by airline stocks that were boosted by lower oil prices and a recommendation for a new runway at London’s Heathrow airport.
The blue-chip FTSE 100 index was up by 80.88 points, or 1.2 per cent, at 6,608.59 points by the close. It was still about seven per cent off a record high of 7,122.74 points reached in late April.
Airlines were among the best performers. EasyJet, British Airways’ owner International Consolidated Airlines Group (IAG) and travel group TUI advanced 2.4-3 per cent.
Airline shares were boosted as oil prices fell on the back of record new production levels and after a government-appointed commission said Britain should build a third runway at Heathrow.
“Improving capacity at Heathrow will definitely help those stocks, while the lower oil price is giving them a further lift,” said Securequity sales trader Jawaid Afsar.
London and other European stock markets got a further boost after the Financial Times reported Greek Prime Minister Alexis Tsipras had written to international creditors saying Greece was prepared to accept a bailout offer published on June 28, provided several conditions were changed.
However, Germany said it was sceptical about restarting negotiations while a referendum about the international lenders conditions was still scheduled for Sunday, and stocks pared gains after Tsipras reiterated his position that Greece should vote to reject the bailout.
Despite the FTSE’s rebound, which followed a 2 per cent drop on Tuesday that sent the FTSE down to its lowest level since mid-January, many traders remained cautious given the uncertainty over Greece.
The fate of Greece’s membership in the 19-nation euro currency bloc remains in the balance ahead of a referendum on Sunday when Greek citizens will vote on whether to accept the austerity terms of continued international aid.
Mid-cap outsourcer Serco rallied 6.5 per cent after it reaffirmed its profit and sales forecasts for the current year as it continues to overcome a disastrous period of contract problems and scandals.
Among stocks losing ground, Speedy Hire – which is also outside the FTSE 100 index – slumped 30 per cent after it issued a profit warning and announced the departure of its chief executive.