MARKET REPORT: Airlines avoid turbulence on a downbeat day for stocks

Shares in airline group IAG, which includes British Airways, Iberia and Aer Lingus, rose 4.7 percent, or 7.45 pence, to 167.45 pence as investors welcomed the resumption of dividend payments.

IAG last paid an interim dividend in 2019, months before the pandemic grounded airlines around the world, wreaking financial havoc.

The dividend added to better-than-expected second-quarter results as the company called off an acquisition of Spanish airline Air Europa. Panmure Liberum transport analyst Gerard Khoo said the resumption of dividend payments underlined the strength of IAG’s cash generation and balance sheet.

He noted that it was the only airline for which he had raised profit estimates in this round of reporting. But the overall mood was cautious as global markets slumped, led by technology problems and fears of a U.S. recession.

The FTSE 100 fell 1.31 per cent, or 108.65 points, to 8,174.71, while the FTSE 250 fell 2.95 per cent, or 632.88 points, to 20,826.35.

Scottish Mortgage Investment Trust, which holds major holdings in U.S. chip stocks, lost 4.5 percent, or 38.4 pence, to 813.2 pence. U.S.-focused investment firm Pershing Square also fell sharply, dropping 5.5 percent, or 208 pence, to 3,588 pence.

Japan-focused investors struggled after Tokyo stocks fell. Fidelity Japan Trust, which has investments in Nikkei components, lost 7%, or 12 pence, to 160.5 pence, while Baillie Gifford Shin Nippon, which backs smaller companies, fell 3.7%, or 4.2 pence, to 111 pence.

Technology woes aside, shares in pharmaceutical giant GSK rose 2.4 percent, or 36.5 pence, to 1,562.5 pence following news that the U.S. Food and Drug Administration had approved its Jemperli treatment in combination with chemotherapy and for its own use in adults with endometrial cancer.

But product testing and certification company Intertek fell 1.4 percent, or 70 pence, to 4,884 pence, even though it said it was on track to meet its medium-term targets after improving margins boosted first-half performance.

And luxury group Burberry fell 4.9 percent, or 37.2 pence, to 730.2 pence after Italian footwear and leather goods firm Salvatore Ferragamo reported a drop in profits.

Luxury carmaker Aston Martin also bucked its trend, falling 4.1 percent, or 6.3 pence, to 145.9 pence, following news it has raised 135 million pounds through a debt issue as it prepares to boost sales.

Chief Financial Officer Doug Lafferty said the bond issuance came after receiving encouraging feedback following the company’s first-half results.

Among small caps, NCC Group added 8.1 per cent, or 11.8 pence, to 156.8 pence after agreeing to sell Fox Crypto, part of its cyber division in the Netherlands, for €77m (£65.7m). Lender Vector Capital rose 18.2 per cent, or 5 pence, to 32.5 pence after announcing a £3.7m return to shareholders through a takeover bid for shares at 33 pence each, mitigating a fall in half-year results. It is leaving AIM as it has been unable to access new share capital on acceptable terms.

And Skinbio Therapeutics fell 3.5 percent, or 0.5 pence, to 13.75 pence after the life sciences company announced a private placement of shares at 10.5 pence each.