London Report: FTSE stalls at a five-month high as big storm hits

BRITAIN’S blue chip share index steadied yesterday after hitting a five-month high, stalling just above the key 6,700 points level as a mixed crop of earnings led to profit taking and bad weather curbed activity.

Airlines were among those hit by profit taking, as the St Jude storm in Britain disrupted flights. Easyjet dropped 2.3 per cent, while IAG, which owns British Airways and Iberia, fell 1.2 per cent.

Insurers were also hurt, with Aviva, Prudential and Resolution off 0.3 to 0.6 per cent.

“We’ve seen sellers of insurance companies, possibly the expected clean-up bill could be having an effect there,” said Jordan Hiscott, trader at Gekko Global Markets, referring to the worst storm to hit Britain in a decade as

hurricane-strength winds battered parts of the country.

“We also have large sellers in Easyjet, mainly from leveraged accounts,” he said.

For the broader market, the weather meant reduced activity as many people were unable to get into work. Volumes on the FTSE 100 were at 80 per cent of the 90-day average, compared to 92 per cent on the Eurozone EuroSTOXX 50.

On the flip side, though, the storm damage could prove a boon for the likes of temporary energy provider Aggreko, which led yesterday’s gainers.

It jumped six per cent after it said it expected underlying revenues and margins to be ahead of the prior year both in the second half and on a full-year basis.

In addition to potential business from the adverse weather conditions, traders said Aggreko’s broadly in-line figures had prompted a squeeze higher in the stock as people took off “short” bets on future falls in the share price.

Other top risers were Randgold Resources, AstraZeneca, Whitbread and Shire.

The FTSE 100 closed up 4.48 points or 0.1 per cent at 6,725.82, showing some signs of running out of steam after scaling a five-month intra-day high of 6,739.66 points.

“It’s been extremely strong for weeks,” said Clive Lambert, technical analyst at FutureTechs. “It’s too early to bet against the recent rise ... but if you look at historical charts we are getting close to massive resistance.

“The FTSE has got a lot of challenges immediately above it which is something to be wary of,” he added, noting the 6,750 area which served as a peak in 2007 prior to a sharp downward correction.