Shares in the hotels group Hilton fell 4 per cent yesterday, the largest casualty in the FTSE 100, after the bombings in Turkey fuelled concerns about a recovery in the travel market.
The fears offset a positive trading statement from the group, which also owns the Ladbrokes betting chain.
Group profit rose by 15.1 per cent in the four months to 31 October, mainly thanks to a strong performance in its betting and gaming division.
Hilton, led by chief executive David Michels, said the hotels division was struggling in Continental Europe and the Nordic region. But it had seen an improvement in the UK, the Middle East and Asia Pacific.
Despite the upbeat statement, the shares fell 8.25p to 199.5p as investors feared the blasts in Turkey would increase uncertainty in an already fragile travel market.
The stock had traded as high as 210p before news of the bombings broke.
Hilton said its betting division had performed "very well" during the period with growth of more than 6 per cent in its so-called gross win - the proportion of punters' money left with Ladbrokes.
It said the Government's decision to allow bookmakers to continue to operate fixed-odds betting terminals was clearly "positive news". Hilton currently operates 3,500 of the machines across its 1840 outlets and is set to add more. A spokesman dismissed speculation that Ladbrokes would be demerged or floated soon. "That's not going to happen," he said. "We have no immediate thoughts on these things."
At the hotels arm, revenue per available room fell 6 per cent in the July to October period compared with a year before. Hilton said there were "more positive signs emerging in the UK, the Middle East and Asia Pacific".
Continental Europe - which makes up 35 per cent of the hotel division's profits - remained tough. "We're not anticipating any significant improvement over the short term," the spokesman said.
Julian Easthope, an analyst at UBS, described the trading statement as positive overall.
"The results were positive," he said. "This is the first proper upgrade [to the numbers] since September 11 so they were a good set of results."
Following the announcement, Mr Easthope lifted his pre-tax profit forecast by £30m to £260m for the current year and by £50m to £305m for the year after.