Travel firms have taken a hit on the London stock market after the escalating political unrest in Egypt led to flight delays and holiday cancellations.
The Government advised against all but essential travel to the Egyptian cities of Cairo, Alexandria, Luxor and Suez after thousands of Egyptians defied a curfew on Sunday night and continued their protests.
Thomson Holidays owner TUI Travel and Thomas Cook saw shares drop 2% and 3% respectively, while British Airways parent International Consolidated Airlines also suffered a 1% decline.
Tens of thousands of protesters have been demonstrating across Egypt for seven consecutive days, calling for the resignation of President Hosni Mubarak, who has maintained a tight grip on power for 30 years.
The wider FTSE 100 Index market pared losses from earlier in the day to stand 0.1% lower as concerns eased over access to the Suez Canal and the potential impact any disruption would have on oil supplies.
Oil prices fell back slightly and Abdalla Salem El-Badri, the head of oil producers’ group Opec, said he did not expect the turmoil in Egypt to affect the key water channel – a major conduit for Persian Gulf oil to reach Europe and North America.
The price of Brent crude in London steadied at just below 100 US dollars a barrel, while the New York-listed price fell back to near 90 US dollars a barrel.
The volatility led to investors piling cash into safer-bet investments such as gold, the US dollar and Swiss franc.
Kathleen Brooks, analyst at Forex, said: “Protests on the streets of Cairo may have lost some of their intensity on Monday, but the pressure is still on President Mubarak to step down. The political uncertainty this creates is unnerving investors and we would expect the safe havens of the dollar, the franc and the yen to remain in demand for as long as this crisis remains unresolved.”
Sentiment in the oil sector strengthened, with FTSE 100 firms such as BG Group, Essar Energy, Petrofac and Royal Dutch Shell all clawing back from earlier losses.