FTSE up; BA gains after airport strikes averted

* FTSE up 0.4 pct

* British Airways up as BAA averts airport strikes

* Miners firm, Kazakhmys gains on BofA Merrill Lynch upgrade

By David Brett

LONDON, Aug 17 (BestGrowthStock) – Britain’s blue-chip shares rose
on Tuesday with British Airways (BAY.L: ) a top gainer after
operator BAA and the Unite union reached a deal to prevent a
strike by ground staff at major UK airports.

By 0754 GMT, the FTSE 100 (.FTSE: ) was up 18.36 points, or
0.4 percent, at 5,294.46, albeit in holiday-thinned trade. It
ended flat at 5,276.10 on Monday, having retreated over 1.0
percent in the previous week.

“We are having a bit of respite from the previous sell-offs
… but the volumes are still pretty low and investors are
latching onto individual pieces of news but there’s not a huge
amount out there at the moment,” said Giles Watts, head of
equities at City Index.

British Airways (BAY.L: ), up 1.7 percent, led a clutch of
travel related firms higher after a threatened walk-out by
airport ground staff including security guards, firemen and
engineers over a pay dispute was averted.

The strike would have likely shut BAA’s six British
airports, which include London’s Heathrow and Stansted,
disrupting the plans of thousands of travellers at the height of
the holiday season. [ID:nLDE67F1RQ]

Travel firm Tui Travel (TT.L: ) and mid-cap peer Thomas Cook
(TCG.L: ) each rose 0.5 percent.

Appetite for the mining sector remained strong following
bullish broker comment on Monday speculating on stronger future
demand from China, the world’s largest consumer of raw
materials, which offset worries over growth prospects in
Britain, the U.S. and Japan.

Kazakhmys (KAZ.L: ) was the second highest blue-chip riser, up
1.9 percent, as BofA Merrill Lynch upgraded its recommendation
on the miner to “neutral” from “underperform”.


The banking sector, which has been hit recently by worries
over the slowdown of the economic recovery, was back on the
front foot as investors bought in on the dips.

Lloyds Banking Group (LLOY.L: ) and Royal Bank of Scotland
(RBS.L: ) each climbed 1.0 percent.

Aviva (AV.L: ) rose 1.5 percent having rejected a 5 billion
pound ($7.81 billion) offer from rival RSA Insurance Group
(RSA.L: ) on Monday.

“Given that any kind of bid action from RSA is likely to be
protracted clients are seeing upside in all of the sector …
there is speculation in that sector generally and clients are
latching onto that,” City Index’s Watts said.

Mid cap UK insurance buyout vehicle Resolution (RSL.L: ) said
on Tuesday it would hunt out further acquisitions in a
consolidating sector, as it posted an interim profit compared
with a loss a year earlier. [ID:nLDE67F1OM]

Resolution shares rose 2.4 percent, while FTSE 100-listed
insurer Prudential (PRU.L: ) was up 1.5 percent.

BP (BP.L: ) fell 0.5 percent as technical issues on Monday
muddled the timing of its planned final kill of its blown-out
Gulf of Mexico oil well as concerns lingered over the
environmental and health fallout from the world’s worst offshore
oil spill. [ID:nN16270618]

Edinburgh-based Cairn Energy (CNE.L: ) was the top faller,
down 1.3 percent, shedding some of the previous session’s gains.

On Monday Vedanta Resources (VED.L: ) said it would spend up
to $9.6 billion acquiring as much as 60 percent of Cairn India,
in which Cairn Energy holds 62.4 percent.

(Editing by Erica Billingham)

FTSE up; BA gains after airport strikes averted