A key British stock market index outperformed its European peers on Tuesday, led by a rise in travel stocks and commodities, as optimism was also supported by upbeat manufacturing data.
FTSE 100 UK: UKX,
the index of leading London stocks by market capitalization hovered around unchanged, outperforming most other major European indices that were lower in the red. The FTSE 100 Index’s relative superiority on Tuesday came after UK markets were closed to trading on Monday due to a weekend.
While the broader narrative continues to reflect economic optimism over the decreasing severity of the COVID-19 pandemic, with investors continuing to view inflation as a risk to the markets, airline stocks have received support from plans to open Europe to wider travel.
On Monday, the European Union’s executive branch recommended easing travel restrictions to allow tourists from more countries to enter the 27-member bloc.
Read more: EU proposes to open external borders as vaccination campaigns gain traction
According to a proposal from the European Commission, people who have been fully vaccinated against COVID-19 with an EU-approved vaccine or who have come from a country with a “good epidemiological situation” will be invited to the region. EU approves Pfizer PFE vaccines,
and Johnson & Johnson JNJ…
“The news that the European Commission is taking steps to open the continent for the summer tourist season raises the appetite for risk,” said Sophie Griffiths, an analyst at Oanda. “In addition, the UK’s pending announcement of a green list of countries to which people can travel adds additional support to travel and tourism companies.”
UK Commerce Secretary Liz Truss told Sky News on Tuesday that a green list of countries will soon be published for the British to travel to without the need to isolate themselves upon return.
IAG UK Airline Promotions: IAG
– owned by British Airways – and easyJet UK: EZJ
took off in London auction with IHG InterContinental Hotels Group
the drain is also lifting.
“In addition to the optimistic sentiment, the data showed that UK manufacturing activity reached a 27-year high in April,” Griffiths added.
The IHS Manufacturing Purchasing Managers Index rose for the 11th straight month to 60.9 in April, the highest since 1994.
Other stocks that contributed to the relative strength of the FTSE 100 were companies exposed to commodity prices.
“The catalyst for this latest growth is the chatter about the commodity supercycle, the rise of oil and mining companies, and continued optimism about the opening up of the global economy,” said Russ Mold, an analyst at AJ Bell.
A plus: Is there a new commercial supercycle? Perhaps not, these analysts say.
Rio Tinto UK Mining & Metals Shares: RIO,
BHP UK: BHP,
Anglo-American UK: AAL,
Antofagasta UK: ANTO,
Glencore UK: GLEN,
Polymetal International UK: POLY,
and Fresnillo UK: FRES
all rose, as did the major oil companies BP UK: BP
and Royal Dutch Shell UK: RDSA…
Tech stocks added weakness to London’s key index, including industrial software group Aveva UK: AVV,
Ocado UK Online Product & Robotics Logistics Group: OCDO,
and food delivery service Just Eat Takeaway UK: JET