THE FTSE top 100 steadied yesterday, paring early losses after a stronger open in the United States but dogged by an airline sector weakened by a profit warning from budget carrier Ryanair.
The FTSE 100, which had been 0.6 per cent lower at midday, retraced its losses entirely in the first hour of trading on Wall Street, where a rally in the tech sector drove gains.
While stocks have fallen since late July, UK blue chips have outperformed the S&P 500 over that period. US stocks had also missed out on strong gains in Europe on Monday due to the Labour Day holiday.
“The US market was hit a bit harder on the way down, so there's a correction on that side, which in turn can help in Europe,” Toby Morris, senior trader at CMC Markets, said.
The FTSE 100 was closed 0.1 per cent higher, up just 6.33 points at 6,466.66 at 14:45 GMT.
Vodafone led gainers, up 2.2 per cent after a five per cent slide on Tuesday with traders attempting to ascertain fair value for the stock after it sold its holding in a joint venture with Verizon, prompting a 9.6 per cent gain in a week.
Johnson Matthey also gained strongly, up 1.9 per cent after a target price upgrade from JP Morgan.
Worries about disruption from possible US strike on Syria and a weak update from Ryanair set a soft tone for the day for UK-listed airlines.
Budget airline easyJet, which reports traffic numbers today, fell 5.1 per cent while British Airways parent IAG dropped 1.2 per cent.
“The market is certainly keeping its eyes on Syria... and if oil prices stay high, airlines would suffer further from that. Ryanair had a profit warning, and easyJet is a very similar airline, so there's concern that easyJet's numbers may follow suit,” Lee Armitage, senior trader at Accendo Markets, said.
Shares in the Irish airline, which said it could miss its full-year profit forecast, sank 11 per cent.
The FTSE 100 failed to recover the 6,500 level which it fell through on Tuesday, when shares dropped 0.6 percent against a backdrop of investor concern over Syria.
Also weighing on the UK market was a fall in the value of stocks trading without rights to their latest dividend, including Resolution, TUI Travel, and BHP Billiton, which took 4.23 points off the index.