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London midday: Stocks in the black as travel sector rallies; retail sales in focus

By Michele Maatouk

Date: Tuesday 26 May 2020

London midday: Stocks in the black as travel sector rallies; retail sales in focus

(Sharecast News) - London stocks were off earlier highs but still firmly in the black by midday on Tuesday, with travel shares pacing the advance as investors welcomed an easing of lockdown measures and travel restrictions.
The FTSE 100 was up 1.4% at 6,076.50, with sentiment boosted by news that non-essential shops will be allowed to reopen from 15 June. Prime Minister Boris Johnson also said on Monday that outdoor markets and car showrooms can reopen from 1 June.

CMC Markets analyst Michael Hewson said: "Travel and airlines stocks are doing well on the back of yesterday's reports that German national carrier Lufthansa is on the brink of a €9bn bailout from the German government, with British Airways owner IAG leading the way, along with decent gains for easyJet and Ryanair."

However, he noted the deal still needs to get the nod from the European Commission, which might impose a number of conditions in return for its approval, including the surrender of key flight slots.

Hopes of a coronavirus vaccine were also helping to underpin the tone after US biotech company Novavax said on Monday that it had begun the first human study of its experimental vaccine.

In addition, news of 'Project Birch', which would see the UK government adopt similar state investments into private businesses as countries such as France and Germany, also lifted the mood.

"With European governments conveniently ignoring EU state aid rules, it is perhaps inevitable that pressure for the UK government to follow suit will grow," said Hewson. "It is already being reported that a number of big UK employers are knocking on the government's door, including Jaguar Land Rover amidst reports that the UK government is considering a similar response."

Figures released earlier by the Confederation of British Industry showed retail sales remained depressed in May, with the gauge of retail sales rising to -50 from -55 in April.

CBI chief economist Rain Newton-Smith said: "The retail sector is at the sharp end of a crisis, with many businesses up against it. The government's support packages are making a real difference, with more shops reporting that jobs have been furloughed, rather than lost. The furlough system will need to adapt as more businesses open their doors in the months ahead.

"As we gradually reopen the economy, retailers may yet need more support from the government if demand falters. Ensuring safety in the workplace remains the top priority, as more firms look to bring staff back to work. Many challenges remain in managing supply chains and costs in a tough environment."

In equity markets, gains in the travel sector also came after news agency DPA suggested that the German government plans to end a travel warning for tourist trips to 31 European countries from 15 June and as Spain announced it will lift its 14-day quarantine for overseas arrivals from 1 July.

TUI surged, while InterContinental Hotels and cruise operator Carnival were also high risers.

EasyJet was in focus after chief financial officer Andrew Findlay resigned just days after the airline's founder Stelios Haji-Ioannnou failed to remove him and three other leading board members. The budget airline said Findlay was expected to work his year's notice while the board looks for a replacement.

Elsewhere, Aston Martin rallied as it confirmed the departure of chief executive Andy Palmer to be replaced by AMG chief Tobias Moers in August.

Market Movers

FTSE 100 (UKX) 6,076.50 1.39%
FTSE 250 (MCX) 16,909.64 3.11%
techMARK (TASX) 3,740.20 0.48%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 227.30p 19.13%
easyJet (EZJ) 639.60p 14.75%
Whitbread (WTB) 2,544.00p 13.98%
Rolls-Royce Holdings (RR.) 318.70p 13.58%
Melrose Industries (MRO) 105.15p 12.85%
Carnival (CCL) 1,104.00p 12.47%
InterContinental Hotels Group (IHG) 4,029.00p 10.47%
JD Sports Fashion (JD.) 617.60p 9.35%
Centrica (CNA) 38.44p 8.93%
British Land Company (BLND) 377.80p 8.56%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,495.00p -2.62%
London Stock Exchange Group (LSE) 8,260.00p -2.04%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,692.00p -1.96%
Fresnillo (FRES) 778.60p -1.94%
AstraZeneca (AZN) 8,838.00p -1.76%
Rio Tinto (RIO) 4,203.00p -1.40%
Polymetal International (POLY) 1,677.00p -1.35%
Reckitt Benckiser Group (RB.) 7,044.00p -1.23%
Croda International (CRDA) 5,064.00p -1.17%
Tesco (TSCO) 225.20p -0.92%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 410.90p 36.15%
Aston Martin Lagonda Global Holdings (AML) 47.14p 32.94%
Cineworld Group (CINE) 71.00p 21.58%
Mitchells & Butlers (MAB) 183.00p 20.08%
SSP Group (SSPG) 295.40p 19.98%
WH Smith (SMWH) 1,107.00p 15.01%
Stagecoach Group (SGC) 67.95p 14.49%
Helios Towers (HTWS) 156.00p 14.04%
Hammerson (HMSO) 71.46p 13.03%
Virgin Money UK (VMUK) 87.58p 11.57%

FTSE 250 - Fallers

Hochschild Mining (HOC) 197.60p -5.90%
Softcat (SCT) 1,207.00p -3.98%
Marston's (MARS) 63.55p -3.71%
Centamin (DI) (CEY) 173.55p -3.37%
Petropavlovsk (POG) 25.45p -3.05%
Balfour Beatty (BBY) 236.00p -3.04%
Plus500 Ltd (DI) (PLUS) 1,301.00p -2.11%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,692.00p -1.96%
Ascential (ASCL) 269.80p -1.82%
PZ Cussons (PZC) 176.20p -1.56%


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