Rolls-Royce was under pressure yesterday as fears mounted that its orders would be hit by the rising number of airlines that are grounding planes.

Last Friday Continental Airlines said it would ground 67 aircraft, following United, American and Delta.

Tristan Sanson of Exane BNP Paribas warned that this would spread to Europe and that engine manufacturers, such as Rolls, would be hit.

He said that, although record oil prices were driving strong orders for new aircraft as airlines wanted the latest more fuel-efficient planes, prohibitive fuel prices could disrupt even these orders. Rolls was down 3 per cent at 380.75p, its lowest level for two years.

British Airways lost 3 per cent to 227.25p.

The FTSE 100 was down 6.3 by 10.24am at 5,900.

Oil stocks were providing support after the record oil price was reached on Friday, which eased only slightly this morning. BP was the top gainer up 2 per cent at 474p. Shell was up 1.5 per cent and Cairn Energy 1.4 per cent.

Vodafone was another faller, down 3 per cent to 380p on fears it would overpay for the acquisition of Tiscali, the broadband operator in Italy and the UK. Tiscali's finance director quit today, sparking talk that a sale was agreed.

Informa was the top performing mid-cap stock, up 13 per cent after UBM confirmed that it was in talks about an all-share merger with the Lloyd's List publisher. There had been weekend reports that it had rebuffed a bid from UBM.

UBM rose 2 per cent to 618.5p.

Petrofac, the oil services group, gained 6 per cent to 677.5p on an upgrade by UBS from "neutral" to "buy" and on the rising oil price.

Barratt Developments lost 8 per cent to 130p on a growing fear of writedowns and a rights issue.

Quintain Estates, down 7 per cent to 130.5p, was afflicted by similar worries. There are fears that its valuation of its Wembley and Greenwich developments are too high and will need to be cut.

Logica, the renamed IT consultant Logica CMG, fell 2p to 120p after Panmure Gordon warned that if sales deteriorated further it would be close to breaching debt covenants. Analyst George O'Connor said new chief executive Andy Green's plans to axe staff "Is likely to lead to worse sales growth than expected, as the account management process is altered, and a cash outlay contributing to higher than expected net debt.

"On a poorer sales scenario ... net debt to EBITDA moves to 2.5 times - a fraction off the 2.6 times covenant level. Sell."

Pendragon, the car dealer, fell 7 per cent to 28.25p. Figures for car registrations in May showed the first fall in volumes since February. Private registrations were the worst hit, down 9.5 per cent, offset by rising fleet registrations.

Citigroup said: "Our concern is that the weaker consumer environment, reduced availability of car finance and increased taxation on older (more polluting cars) is having a negative impact on used car prices. We believe Pendragon is vulnerable, due to its high exposure to the used car market. While Looker's dealer business looks threatened, it should benefit from the strength of its parts distribution business. Inchcape remains our preferred stock in the space, due to its low UK exposure (<25%), emerging markets growth and strong balance sheet."

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