Optimism over an end to social restrictions is driving travel and leisure stocks higher, adding buoyancy to European markets on Tuesday as indexes across the continent hovered around flat or fell. Commodity prices at multiyear highs have also added strength to markets.
The pan-European Stoxx 600
fell 0.9%, while London’s FTSE 100
was just below flat. In Paris, the CAC 40
was 0.2% lower, and Frankfurt’s DAX
were pointing down around 20 points, set for a weak open after the Dow Jones Industrial Average
eked out a slightly higher close on Monday to close at 31,521.
British stocks led European trading, as the market absorbed Monday’s news from U.K. Prime Minister Boris Johnson on the plan to gradually reopen the country.
The U.K. is among the world’s leaders in COVID-19 vaccinations, and Johnson’s government has set a tentative early date of Jun. 21 for all social restrictions to be lifted. Domestic holidays could become possible by mid-April.
Also read: Boris Johnson outlines road map to take England out of lockdown
“The FTSE 100 [is] leading the way buoyed by outperformance in travel and leisure stocks as well as the basic resources sector, with commodity prices sitting at eight-year highs,” said Michael Hewson, an analyst at CMC Markets.
All the major European markets opened higher but have since given up gains, with most indexes falling.
“Travel and leisure stocks are getting a lift this morning after yesterday’s announcement of a reopening schedule in the U.K. prompted a surge in holiday bookings,” Hewson said.
Shares in both British Airways owner IAG
and Air France–KLM
were near 7% higher, with Lufthansa
stock lifting more than 5.5%. In the aircraft manufacturing sector, Airbus
stock rose 4% and shares in troubled British engineer Rolls-Royce
jumped near 9%.
Optimism was also present in hotel stocks, with shares in InterContinental Hotels Group
restaurant and hotels group Whitbread
and French hospitality giant Accor
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The major European oil companies also lifted as crude prices remain at 13-month highs. Benchmark Brent
was near 1.5% higher, trading at more than $66.15 per barrel.
Shares in BP
Royal Dutch Shell
Strong commodity prices boosted shares in mining giants Rio Tinto
and BHP Group
which all rose more than 1%.
was a major faller in European trading, with the global banking giant down as much as 2% after posting a 34% fall in profits through 2020.
Shares in Scottish Mortgage Investment Trust
were down more than 5%. The publicly traded trust has significant holdings in big technology stocks like Alibaba
which have suffered recent share-price slides.