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Last Updated: Friday, 11 August 2006, 21:02 GMT 22:02 UK
Markets steady after bomb alert
British Airways plane taking off
Airlines hope to see their share prices and planes taking off again
World markets have shown signs of steadying in the aftermath of police disrupting a plot to blow up planes flying between the UK and US.

US investors managed to shrug off concerns, with analysts expecting the effect of the current crisis to be short-lived, bolstering Asian markets.

The US market ended lower, but analysts blamed concerns over the economy after retail data for the fall.

In the UK, the FTSE ended barely changed after moving higher early on.

British Airways shares appeared to echo the fortunes of the FTSE 100 index, eased back from significant gains in early trade, to close just 0.25p lower at 370p.

The carrier said it now expected to resume most short-haul services to and from London Heathrow, although there would be delays.

But Easyjet, which cancelled a number of flights on Thursday, rose 3p to 417p.

On Thursday, the FTSE 100 initially tumbled 107 points - wiping over 20bn off the value of the top-ranked companies - following concerns over the impact on the travel industry, but rallied to close 37.1 points lower at 5823.4.

After venturing into positive territory in earlier in the day, the FTSE 100 ended just 3.3 points lower at 5,820.1.

Turbulent

Across the Atlantic, Wall Street investors shrugged off fears that the current crisis would have a long term effect. However, other market factors weighed on the index leaving it to close in the red.

Investors instead turned their attention to problems at Apple Computers, which had delayed its results amid a stock options inquiry.

Meanwhile sentiment also suffered after strong retail sales data prompted concerns that the Federal Reserve could soon raise rates again and cool growth.

But, investors remained cautious about shares in the three airlines allegedly targeted by the bomb plot.

Shares in Continental, United and American Airlines all slipped back by around 7% by the close of trade.

Unfortunately, terrorist alerts and scares have become a part of life in the UK, particularly since the July 2005 bombing in London
Howard Archer
Economist, Global Insight

In Japan, the Nikkei index ended Friday trading down 0.42% - although this was driven by data showing a slower-than-expected domestic growth, rather than by the bombing threat.

The events in the UK saw oil prices fall sharply, amid suggestions that the news would curtail travel in coming months, cutting demand for fuel.

Limited impact

While there would be some impact on airlines, tourism and related sectors, the alleged bomb plot was unlikely to have much effect on the UK economy, said Global Insight economist Howard Archer.

Negative impact on consumer and business confidence was unlikely to last long, he added.

"Unfortunately, terrorist alerts and scares have become a part of life in the UK, particularly since the July 2005 bombings in London," Mr Archer said.

"While the alleged aircraft plot appears to be a particularly major incident, at the end of the day nobody has been hurt and no material damage done.





MARKET DATA - 11:36 UK

FTSE 100
5429.64up
23.70 0.44%
Dax
5733.05up
19.54 0.34%
Cac 40
3784.02up
14.48 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
S&P 500
1115.71up
11.22 1.02%
BBC Global 30
5707.15up
20.65 0.36%
Data delayed by at least 15 minutes

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