FTSE slides after Evergrande sparks sell-off but airliners rebound sharply

The FTSE 100 slid as it followed the Evergrande-driven global sell off but recovered from intra-day losses on the back of a recovery by travel stocks.

British Airways owner IAG soared by more than 11%, or 16.68p, to 166.18p after it was confirmed that the White House will ease travel restrictions to US from Europe in November.

Airliners had already been buoyed by the announcement last week that UK restrictions would be eased but their shares took flight at the end of the session on Monday.

London’s top flight closed 59.73 points, or 0.86%, lower at 6,903.91 on Monday.

Michael Hewson, chief market analyst at CMC Markets UK, said: “With Chinese mainland markets closed today, along with Japanese markets, the Evergrande inspired selloff in the Hang Seng, which hit thirteen-month lows, has bled into today’s European session with big falls for the FTSE 100, and the DAX, with both hitting a two-month low.

“The biggest fallers today have been the usual suspects of basic resources and financials as concerns about the economic outlook and falling yields drag on both.

“Its not all doom and gloom however with airlines starting to see a little less turbulence, and gain altitude, in the wake of the recent announcement on the simplifying of international travel and quarantine restrictions by the UK government on Friday.”

Elsewhere in Europe the tone was even more downbeat, as the new Dax40 suffered a particularly inauspicious start.

The German Dax decreased by 2.31% and the French Cac moved 1.74% lower.

Across the Atlantic, the US markets opened with a steep slump as the negativity from Asia and Europe travelled across the Wall Street.

Meanwhile, sterling dipped towards a one-month low ahead of the Bank of England’s meeting later this week.

The pound was down 0.04% versus the US dollar at 1.366 and was 0.12% lower against the euro at 1.164.

London-listed drinks firms took a dive amid fears that the carbon dioxide shortage could impact production of fizzy drinks, tipping Fever-Tree, Coca-Cola European Partners, Britvic and Irn Bru maker AG Barr into the red.

In company news, Prudential tumbled after that the life insurer said it will raise around £2.1 billion (2.9 billion dollars) through a public offer and share placing in Hong Kong.

The FTSE 100 company confirmed the funding will be used to pay off debt and invest in its Asian and African operation.

However, the move sparked a sell-off which saw it fall by 121p to 1,324.5p at the close of play.

Sainsbury’s shares moved higher after weekend reports that the retailer has hired external advisers in defence of any potential takeover offer.

The resultant buyout speculation drove a 4.5p rise in its shares to 286.9p.

The price of oil dipped as concerns rise over what effect a disorderly outcome to the Evergrande saga might have on the Chinese economy.

Brent crude decreased by 1.1% to 74.46 dollars per barrel.

The biggest risers on the FTSE 100 were IAG, up 16.68p at 166.18p, AstraZeneca, up 496p at 8,559p, Rolls-Royce, up 4.7p at 115.7p, and Polymetal, up 27p at 1,345.5p.

The biggest fallers of the day were Prudential, down 121p at 1,324.5p, Standard Chartered, down 31p at 411p, Schroders, down 254p at 3,583p, and DS Smith, down 23.4p at 430.5p.