Travel Shares Climb Amid Holiday Optimism
Easing lockdown measures give investors hope for economic recovery during the summer.
Tuesday morning trading saw shares in airlines and retailers increasing across the UK and EU, apparently symptomatic of growing hopes that international travel restrictions will ease as summer comes about.
London’s FTSE 100 surged by 1.9%, and the more UK-centric FTSE 250 by 3%. Pubs, cinema groups and retailers also saw share price growth.
The gains followed a Monday evening announcement from Prime Minister Boris Johnson that car showrooms and outdoor markets will be allowed to reopen from next week, with high street shops, department stores, shopping centres and other non-essential retail premises being able to resume business from 15 June.
The greatest earners in Tuesday trading were air travel and hotel companies, with airline conglomerate and British Airways owner International Airlines Group (IAG) seeing a 15% surge while Intercontinental Hotels Group (IHG) jumped by 14%.
Meanwhile, European shares leaped to an 11-week high, with investor sentiment likely boosted by the German government’s recent €9 billion bailout of Lufthansa.
Markets.com chief market analyst, Neil Wilson, commented on the stock price surges: “Strength in this sector underscores confidence among investors that economies are reopening, and consumers are keen to travel.”
“There is a lot more hope that travel restrictions across Europe will be eased in time for the summer holidays. If the summer holiday season can be saved it would be a big plus after most of us wrote it off.”