Thomas Cook fallout continues to buoy rivals
Investors continued to enjoy the fallout from Thomas Cook, snapping up shares in rivals with insatiable delight.
TUI was the biggest beneficiary from the collapse, with shares topping the FTSE 100 biggest risers for a second day in a row. Shares closed up 58.2p to 959.6p, although it has some way to go to get back to the 1,211p levels not seen since February’s profit warning.
The company was also helped by a full-year trading update, in which boss Friedrich Joussen insisted its business model was proving “resilient” in challenging market conditions and laid out how his firm would be assisting stranded Thomas Cook customers.
EasyJet and British Airways owner IAG both saw shares up 1.9% and 1.1% respectively.
But overall, the FTSE 100 closed the day down, as the pound drew strength from the Supreme Court ruling that found Boris Johnson’s decision to suspend Parliament was unlawful.
Traders appeared to initially welcome the decision, sending the pound up by 0.5% against the dollar and the euro.
However, the price was subsequently cooled as the day wore on as most realised – to coin a phrase used by the previous PM – nothing has changed.
Connor Campbell, financial analyst at SpreadEx, said: “The Supreme Court ruled that the PM’s prorogation was, as evident to many, a cynical and illegal act, clearing the way for Parliament to resume on Wednesday. That means, instead of sitting by the sidelines, sterling can strap back into the gut-churning Brexit rollercoaster, as Leavers and Remainers battle over the fate of the country.”
By markets closing, a pound was up 0.34% against the euro at 1.1348 and up against the dollar by 0.39% at 1.2483.
As a result, the FTSE 100 closed down 34.65 points at 7291.43 – a fall of 0.47%. The leading index tends to fall when the pound rises as international-facing companies, which make up a large chunk of the FTSE 100, become more “expensive” to traders working in dollars.
There was also continued fallout from the weak economic data from France and Germany on Monday, weighing on shares.
In company news, Hotel Chocolat revealed a 14% jump in sales in the year to June 30, hitting £132.5 million, with pre-tax profits up 11% to £14.1 million. Shoppers are still heading to stores, bosses said, and investors appeared happy. Shares closed up 11p at 381p.
Roadside breakdown firm AA said its membership base had stabilised, as bosses unveiled an 8% fall in underlying pre-tax profits to £46 million for the six months to the end of July, although underlying earnings were 2.5% higher at £165 million as revenues rose 2.3% to £491 million.
Shares closed down 0.4p at 68.6p.
Retailer Card Factory saw a 14% drop in half-year profits to £24.3 million as it took a hit from efforts to stockpile ahead of Brexit for the six months to July 31, down from £28.4 million a year ago.
It blamed the costs of its no-deal Brexit stockbuilding, as well as a higher wage bill from the National Living Wage increase and investment in new lines.
Shareholders were unconcerned though, sending shares up 6.5p to 168.5p.
The biggest risers on the FTSE 100 were TUI up 58.2p at 959.6; Hikma up 61p at 2,151p; Ocado up 28p at 1,340p; Sage Group up 10.8p at 684.2p; and Carnival up 57p at 3,675p.
The biggest fallers were Evraz down 26.9p at 460.1p; Auto Trader down 19.3p at 498.5p; Imperial Brands down 74p at 2,020p; Burberry down 65p at 2,119p; and Spirax-Sarco down 235p at 7,770p.