Thomas Cook fell 9 per cent and Tui Travel 3 per cent after trade magazine Travel Weekly quoted the UK managing director of Tui Travel predicting ‘there will be less overseas travel with the weaker pound, high fuel costs and the poor economy’.

‘We do not see a lot of growth,’ Mr. Blastland added. ‘People are trading down and the most economically challenged families may be exiting the market’.

The comments are the first acknowledgement of a slowdown by the UK tour industry.

Tui's shares fell less far since it is being buoyed by the prospect of an inevitable bid in six months time from its parent Tui in Germany.

Thomas Cook's German parent, Arcandor, is more likely to sell down its stake in its associate because it needs cash itself.

The FTSE 100 gained 40 to 3915 as yesterday's big losers, the miners and insurance companies, rebounded, though not as far as they had fallen. Aviva lifted 12 per cent and Prudential 4.5 per cent. Antofagasta, the copper miner, gained 15 per cent and BHP Billiton was up 10 per cent.

In the FTSE 250 DSG International jumped 37 per cent to 14.75p after Credit Suisse, a long time bear on the stock, upgraded it to outperform with a 25p price target saying its figures next week should reassure that it was not about to go bust.

St Modwen Properties continued to rebound from all time lows after a reassuring trading statement on Thursday. It rose 19 per cent to 108p.

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