Shares bounce back after one-day dip

City analysts have played down fears that the hospitality industry will be rocked by last week's bomb attacks in London.

Stock watchers are heartened by the global economic recovery that followed the 9/11 attacks in New York and point to the relatively small scale of the London atrocities.

"The real question is whether Americans will stop travelling," said one City source, "and harsh as though it may seem, 50 deaths in London means that they probably won't."

Trading figures quickly bounced back. The FTSE leisure and hotels stock index closed at 4684.5p on Wednesday following the capital's successful Olympic bid. After Thursday's terrorist attack it dropped by 2.35% to 4574.6p but clawed back 50% of its value to close at 4628.1p on Friday.

KBS Peel Hunt analyst Peter Joseph believes the hotel market will emerge from the events unscathed. "In terms of hospitality stock, the Olympics is good but not that good, and the bombs in London are bad but not that bad."

He also expected US visitors to increase following the dollar's recent rally.

Panmure Gordon analyst Stuart Price agreed with Joseph and said the attacks would not hit the restaurant sector. "The same happened after Madrid - the fall was followed by a rally. The general impression is that the leisure pound is proving resilient."