Market report: Travel operators gain from fall in price of oil

The price of oil was today falling back toward $100 a barrel for the first time in five months after the Opec cartel signalled there would be no need to make cuts in production in order to underpin the price.

Opec insisted the oil price would continue to lose ground in the short term even if current levels of production were pulled back.

That breathed fresh life into the usual suspects, whose cost base is closely linked to the price of crude. British Airways put on 14p at 267p, easyJet added 25½p to 374¼p and Ryanair rose 21 cents to 2.83. Luxury cruise line operator Carnival jumped 107p to 2125p in a thin market.

It was business as usual on the London Stock Exchange today following yesterday's farcical breakdown in trading after the LSE's computer system blew a fuse. As a result, London failed fully to benefit from yesterday's surge in share values and prices were this afternoon trading below their best levels. The FTSE 100 index rose 19.3 to 5465.6. On Wall Street, prices struggled to extend yesterday's gains with the Dow up 19.9 at 11,530.7.

However, mining giant Lonmin continued to beat a retreat — with the price tumbling 182p at 3077p. The shares now trade well below the 3300p being offered by Anglo-Swiss rival Xstrata, down 203p at 2361p. Whispers in the Square Mile say Xstrata may soon withdraw its offer.

RBC Capital Markets blames the weakness of the share price on platinum prices, which have fallen around 20% since the start of August, when Xstrata first made its offer. The speculators are concerned that Xstrata may use this as an excuse to lower its offer. Elsewhere in the mining sector, share prices came under fresh selling pressure, with the dollar's continued strength and weaker commodity prices encouraging investors to switch into the financial sector following the news of the proposed rescue of Fannie Mae and Freddie Mac in the US.

Kazakhmys fell 87½p to 909½p, and Eurasian Natural Resources 71½p at 763p. Those companies to benefit among the banks included institutions hardest hit by the credit crunch. HBOS put on 13½p at 320½p, Royal Bank of Scotland 13½p at 258p and Barclays 23¾p at 378¾p.

JPMorgan has turned bearish of J Sainsbury, up 13½p at 376¼p, following a strong performance by the shares of late. It has downgraded its rating from neutral to underperform, and says the UK's third largest supermarket chain is vulnerable to consumers trading down in order to counter rising food prices.

It is sceptical of consensus claims that Sainsbury's can achieve pre-tax profit growth of between 15% and 20%. It expects profits to decline next year. A weaker pound is pushing up the price of fresh produce in this country, while the rest of Europe sees no change.

Meanwhile, Marks & Spencer suffered a hiccup, touching a low for the day of 255½p on suggestions that a visit by institutional shareholders to Scotland with the management had been postponed. The price later settled 4½p higher at 265¼p.

BG Group slumped 38p to 1055p after chucking in the towel over its bid to acquire New Zealand's Origin Energy for £6 billion.

The deal was scuppered after Origin signed up with ConocoPhillips to form a coal seam gas-to-liquefied natural gas joint venture.

Soco International ticked 9p better 1349p after entering into a farm-in agreement to acquire a 2 9.4% interest in the Marine XIV block, off the Republic of Congo, from PA Resources Congo.

The three companies participating in the farm-in will pay up to a maximum of $30 million for their share of PA Congo's past costs, the cost of a 3D seismic programme and the dry-hole -well costs for the first well to be drilled on the block.