Car manufacturers halt FTSE's rally

With Britain's leading share index finishing higher again on Monday, the third successive day of trading, the resurgence on Tuesday was dampened somewhat by sentiment in the car manufacturing sector. By 11.43 GMT, the FTSE 100 had dropped slightly, by 0.1 per cent, to reach 5780, a fall of 3.5 per cent for March so far.

Chris Bradshaw
shareprices.com - Tuesday, March 22, 2011

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Support for the index was rocked by poor performances from the car manufacturing industry and the related companies that depend on them for their business. Toyota has confirmed that its sites in Japan will not open until Saturday at the earliest and industry insiders have said over 65 per cent of auto production had been wiped out within the last fortnight. Inchcape shed 4.9 per cent catalytic converter company, Johnson Mathew fell by 2.9 per cent.

Engineering firms in general have seen volatile levels of trading over the last few sessions, as the sector mirrors the global economic mood. Linked to a French equipment manufacturer, GKN was one of the notable fallers, losing 3.1 per cent.

Also affected by market talk was TUI Travel who saw 2 per cent wiped off its value as a move to float a container shipping arm of TUI was delayed, temporarily halting the flow of revenue to the tourist trade business.

However, it wasn't all bad news with the oil companies firmly bouncing back to become one of the top performers of the day as the price of crude hovered near record highs.

Cairn Energy rose by 1.6 per cent as news of the sale of its Indian business looked imminent and peer Essar Energy also climbed back 1.9 per cent after sharp losses seen in the previous session.

 

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