Travel stocks TUI, easyJet and Ryanair lifted by Spain summer holiday reopening plan
Plans by some continental countries to to lift restrictions on tourism sent shares in TUI, easyJet and Ryanair surging on Tuesday, spelling hopes of a broader revival in battered consumer stocks.
Travel stocks rose on plans to start reopening hotels and beaches in Spain in July and consumer shares were firmly in the green after a flurry of activity by governments to reopen got the thumbs- up from financial markets.
The elite FTSE 100 index, recovering from its worst sell-off since 1987, rallied to its highest level in 11 weeks, mirroring similar strong gains seen across Europe.
Airline shares led the index after Spain, a magnet for UK sunseekers and Europe’s second-busiest travel destination with 80 million visitors, on Saturday urged tourists to flock back when restrictions are lifted in July 1.
The German government is also reportedly planning to ease a travel ban on 31 countries, paving the way for German tourists to go abroad on holiday again.
UK travellers are still advised by the Foreign & Commonwealth Office not to travel abroad unless the trip is essential.
TUI, the world’s largest tourism company, was the biggest riser gaining a staggering 38% while British Airways owner IAG and easyJet also rose by double digits.
The German government bailout of Lufthansa, set to be announced today, also helped lift sentiment.
Europe’s largest airline Ryanair welcomed Spain’s move and backed its decision to scrap the quarantine period for holidaymakers jetting in, which has become a source of tension for the airline sector.
While still fragile compared with pre-Covid-19 activity, signs of life in the moribund consumer sector and ongoing hopes of a vaccine are slowly lifting investor sentiment around the battered economy.
The specialist FTSE 350 Travel & Leisure index, which tracks the UK’s largest consumer stocks, was up 7% today led by some of the hardest-hit consumer stocks, like pub chain Mitchell & Butlers and Cineworld.
As they are are at the sharp end of the crisis — pubs and cinemas could be the last to reopen — they have become a proxy for Covid-19 investor sentiment and the rally points to more optimism of an economic recovery sooner rather than later.
M&B rose 25% and Cineworld 23%.
The FTSE 100 was up 1.56% or 93.53 points to 6,086.81 and the pound rose one cent to $1.2288 on hopes of a recovery for the UK economy.
Car showrooms and open air markets are set to be allowed to reopen on Monday under the UK government plan.
Marshall Motors, a 98-strong dealership chain which works on behalf of manufacturers likes of BMW and Maserati, said staff were going back to work now to prepare for the reopening.
The company said it would follow health and safety guidelines to help people safe when the doors reopen.
Shares rose 9%
