Investors exit hotel group as blue-chips retreat

A downgrade from UBS weighed on the hotelier, as analysts cut their rating to "sell" from "neutral" following a strong run for the share price.

"We remain relatively cautious on European hotel stocks for 2012. We currently expect modest positive RevPar (revenue per average room) growth in 2012-13, but uncertainty remains and the slowing occupancy growth has often historically led to stock underperformance," UBS said.

The bank says Intercontinental is well placed geographically and still expects earnings per share growth of around 4pc over 2012-13 and a strong possibility of a special dividend in 2012, but reckons these factors are more than priced in.

Intercontinental slipped 1.7pc, which was mirrored by the wider market, with the FTSE 100 falling 19 points to 5,775. But, the FTSE 250 was virtually flat at 10,909.

"This morning the markets are giving back some of their gains from yesterday as the rally in US markets fizzled out last night," said Simon Denham, head of Capital Spreads. "The retreat is seeing the FTSE open lower by some 20 odd points as the bulls take a bit of profit from the strong gains yesterday.

"It was a real risk on scenario following the Fed’s announcement that interest rates are due to remain at their record lows into 2014 and you can safely say that a similar thing might happen here in the UK."

A clutch of miners succumbed to profit-taking having enjoyed healthy gains after Ben Bernanke, the Federal Reserve’s chairman, pledged to keep interest rates low. Antofagasta shed 1.5pc and Rio Tinto lost 1pc.

Polymetal International was on the wane too. Having been lifted by speculation – later denied – that it could merge with fellow Russian miner, Polyus, it fell 1.7pc. Polymetal scotched the rumours on Thursday and Polyus mirrored that yesterday, saying the pair were not in any discussions with respect to “any combination involving the two companies”.

BSkyB recovered 1.3pc while fashion chain, Next, gained 2.4pc to claim the gold medal

Slipping back, however, was oil giant BP. Following news overnight that BP must cover some Transocean oil spill damages, it fell 2.4pc.

A federal judge said BP must indemnify Transocean for some compensatory damage claims over the 2010 Gulf of Mexico oil spill.

US District Judge Carl Barbier, who oversees multistate litigation over the spill, agreed with Transocean that the Swiss driller was not responsible for compensatory damage claims raised by third parties for oil spilled below the ocean surface.

He also ruled, however, that BP need not indemnify Transocean for punitive damages, or civil penalties imposed by the US government under the federal Clean Water Act.

The Telegraph