The FTSE 100 index started the week with a 2 ½ year-high this morning, thanks mainly to British Airways, after oil prices fell again and profit forecasts from Irish rival Ryanair lifted other budget airlines.
The FTSE 100 gained 34 points or 0.7% to 4866.8 - its highest level since June 2002 – within the first two hours of trading after the price of Brent crude oil fell to $44.20 a barrel.
This lifted confidence in airlines in general, but has so far been of most benefit to British Airways which is currently up 3% to 268p.
Ryanair improved things further, even though it is Dublin-listed, as the firm predicted its full-year earnings will hit Euro246m from previous estimates of Euro200m.
EasyJet also rose 4.7% to 225.25p in early trading as a result of oil and Ryanair confidence.
High street retailer Woolworths Group has also seen strong gains elsewhere after Apax Partners Worldwide LLP said it may buy the retailer.
The FTSE All-Share index has risen 0.7% to 2445 this morning.
Asian stocks also rose for the first day in three thanks in part to Canon, the digital camera firm after forecasting record full-year profits.
This had a knock-on effect for most technology companies but most benefited the Nikkei 255 index which closed up 0.6% to 11,387.5 by 3pm in Tokyo.
Canon leapt 2.5% to Yen 5400 after forecasting a sixth straight year of profit for 2005.
Honda Motor Co, Japan’s third-largest motor company, also predicted a fourth straight year of record earnings and gained 2.1% to Yen 5,430.
In the US on Friday, however, markets did not fare as well but are expected to perform better later today along with other global markets.
The Dow Jones closed down 40 points on Friday or 0.38% to 10,427 while the Nasdaq lost 11.3 points or 0.55% to 2,035 and the S&P 500 index dropped 3 points or 0.27% to 1,171.IFAonline
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