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Europe Markets: Travel and leisure stocks surge in standout trading as European markets stall

Europe Markets: Travel and leisure stocks surge in standout trading as European markets stall

2021-02-23 10:16:00
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Optimism about an end to social constraints is pushing travel and leisure stocks up, driving European markets on Tuesday as indices across the continent flat or fell. Commodity prices at multi-year highs have also strengthened the markets.

The pan-European Stoxx 600
SXXP,
-1.17%

fell 0.9%, while the FTSE 100 in London
UKX,
-0.41%

was just below flat. In Paris, the CAC 40
PX1,
-0.50%

was 0.2% lower, and the Frankfurt DAX
DAX,
-1.54%

fell 1.3%.

Dow Futures
YM00,
-0.22%

were headed down about 20 points, set on a weak opening after the Dow Jones Industrial Average
DJIA,
+ 0.09%

Monday a slightly higher close to close at 31,521.

British equities led European trading as the market absorbed Monday's news from British Prime Minister Boris Johnson of the plan to gradually reopen the country.

The UK is one of the world leaders in COVID-19 vaccinations, and Johnson's government has set a tentative early date of June 21, by which all social restrictions should be lifted. Domestic holidays could become possible in mid-April.

Also read: Boris Johnson sketches a road map to get England out of the lockdown

"The FTSE 100 [is] is leading the way, backed by the outperformance in travel and leisure stocks and the commodity industry, with commodity prices at their highest point in eight years," said Michael Hewson, analyst at CMC Markets.

All major European markets opened higher, but have since given up gains, with most indices falling.

"Travel and leisure stocks are getting a boost this morning after yesterday's announcement of a reopening schedule in the UK triggered an increase in holiday bookings," said Hewson.

Shares in both owner IAG of British Airways
IAG,
+ 3.40%

and Air France-KLM
AF,
+ 6.35%

were nearly 7% higher, with Lufthansa
LHA,
+ 2.50%

stock lift more than 5.5%. In the aircraft construction sector, Airbus
SKY,
+ 2.86%

stock rose 4% and shares in troubled British engineer Rolls-Royce
RR,
+ 8.53%

jumped close to 9%.

Optimism was also present in hotel stocks, with shares in InterContinental Hotels Group
IHG,
+ 1.28%

restaurant and hotels group Whitbread
WTB,
+ 2.04%

and the French catering giant Accor
AC,
+ 2.35%

all climb.

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The major European oil companies also rose as crude oil prices remained at their highs in 13 months. Benchmark Brent
BRN00,
+ 0.62%

was up nearly 1.5%, trading at over $ 66.15 a barrel.

Shares in BP
BP,
+ 1.86%

Royal Dutch Shell
RDSA,
+ 0.39%

Total
UNTIL,
+ 1.20%

and Eni
ENI,
+ 0.88%

all dandruff.

Strong commodity prices pushed up the shares of mining giants Rio Tinto
RIO,
-0.44%

Anglo-American
AAL,
-0.23%

and BHP Group
BHP,
+ 0.07%

all of which rose more than 1%.

HSBC
HSBA,
-1.34%

was a major downturn in European trade, with the global banking giant falling as much as 2% after a 34% profit decline through 2020.

Shares in Scottish Mortgage Investment Trust
SMT,
-5.60%

were down more than 5%. The publicly traded trust has significant stakes in major technology stocks such as Alibaba
9988,
-1.20%

and Tesla
TSLA,
-8.55%

that have recently fallen in the stock price.

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