The UK’s main stock market index outperformed its European peers on Tuesday, led by travel and commodities stocks as optimism was also driven by bullish production data.
The FTSE 100
United Kingdom: UKX,
The top London stocks by market cap index was down 0.7% after spending much of the day in the green, ahead of most other major European indices that were deeper in the red. The relative outperformance of the FTSE 100 on Tuesday came after the UK markets closed to trading on Monday for a bank holiday.
While the broader presentation continues to be shaped by economic optimism driven by the decreasing severity of the COVID-19 pandemic, with investors continuing to view inflation as a risk to markets, airline stocks received a boost from plans to launch Europe open again for wider journeys.
On Monday, the European Union executive recommended easing travel restrictions to allow tourists from more countries to enter the 27-person bloc.
According to the proposal of the European Commission, people who have been fully vaccinated against COVID-19 with an EU-approved vaccine or who come from a country with a “good epidemiological situation” are welcome in the region. The EU has approved Pfizer vaccines
and Johnson & Johnson
“The news that the European Commission is taking steps to reopen the continent in time for the summer travel season is increasing the appetite for risk,” said Sophie Griffiths, an analyst at Oanda. “In addition, Britain’s anticipated announcement of a green list for countries people can travel to will further increase support for travel and tourism stocks.”
UK Trade Secretary Liz Truss told Sky News on Tuesday that a “green list” of countries Brits could travel to without isolating themselves on their return would be released shortly.
Shares in airlines IAG
Great Britain: IAG
– owned by British Airways – and easyJet
Great Britain: EZJ
started with EasyJet in London trade
Great Britain: EZJ
InterContinental Hotels Group
Stocks also rise before falling below the flat value in later trading.
“In addition to the bullish sentiment, the data showed UK manufacturing activity hit a 27-year high in April,” added Griffiths.
The IHS index for purchasing managers in manufacturing rose for the eleventh time in a row to 60.9 in April – the highest value since 1994.
Other stocks that contributed to the relative strength of the FTSE 100 were companies that were exposed to commodity prices.
“The trigger for this recent surge is the gossip about a commodity super-cycle with higher oil companies and miners, as well as continued optimism about the reopening of the world economy,” said Russ Mold, analyst at AJ Bell.
Metals and Mining Stocks Rio Tinto
Great Britain: RIO,
Great Britain: POLY,
Great Britain: FRES
all rose, as did shares in the major oil company BP
Great Britain: BP
and Royal Dutch Shell
Technology stocks have weakened the key London index with stocks in industrial software company Aveva
Great Britain: AVV,
Online food and robotics logistics group Ocado
Great Britain: OCDO,
and food delivery player Just Eat Takeaway
Great Britain: JET