Going down: Rolls-Royce

IN A bad week for the market, shares in Rolls-Royce, the aerospace engineering company, were hit hard, falling nearly 9 per cent. "The decline may be related to more cautious noises coming out of European airlines," said Sandy Morris, an ABN Amro analyst. He has a "buy" rating on the stock.

British Airways and others are limiting capacity and concentrating on more profitable business-class seats because weak demand and fare wars are hurting earnings. Boeing and Airbus are also being hurt by price wars in the sales of planes.

Rolls-Royce's decline last week follows a rise to 299.75p on 18 June, after the Paris Air Show, where Rolls-Royce announced several new orders for aircraft engines.