Optimism about the end of social restrictions is driving up travel and leisure stocks, adding buoyancy to European markets on Tuesday, with rates across the continent either staying steady or falling. Commodity prices at multi-year highs have also given markets strength.
The pan-European Stoxx 600 fell 0.9%, while London’s FTSE 100 fell slightly below stability. In Paris, CAC 40 was 0.2% lower and Frankfurt’s DAX fell 1.3%.
Dow futures were pointing down by about 20 points, set for a weak opening after the Dow Jones Industrial Average closed a slightly higher close on Monday, closing at 31,521.
British stocks led European trade, with the market absorbing Monday’s news from UK Prime Minister Boris Johnson about the plan to gradually reopen the country.
The UK is among the world leaders in COVID-19 vaccinations, and the Johnson government has set a provisional date for June 21 for all social restrictions to be lifted. National holidays may be possible in mid-April.
“The FTSE 100 [is] leading the way driven by superior performance in travel and leisure stocks, as well as in the basic resources sector, with commodity prices reaching peak levels in eight years, ”said Michael Hewson, an analyst at CMC Markets.
All major European markets opened up, but have since given up on gains, with most indexes falling.
“Travel and leisure stocks are rising this morning, after yesterday’s announcement of a reopening schedule in the UK, which has generated an increase in holiday bookings,” said Hewson.
The shares of IAG, which owns British Airways, and Air France – KLM were about 7% higher, with Lufthansa’s shares up more than 5.5%. In the aircraft manufacturing sector, Airbus shares rose 4% and the shares of troubled British engineer Rolls-Royce jumped almost 9%.
Optimism was also present in the actions of hotels, with actions in the restaurant of the InterContinental Hotels Group and in the Whitbread hotel group and in the French hospitality giant Accor all climbing.
The main European oil companies have also risen, as oil prices remain at 13-month highs. The benchmark Brent was close to 1.5% higher, trading at more than $ 66.15 a barrel.
BP Royal Dutch Shell Total and Eni’s shares were up.
Strong commodity prices boosted the shares of mining giants Rio Tinto Anglo American and BHP Group, which rose more than 1%.
HSBC saw a major drop in European trade, with the global banking giant dropping 2% after recording a 34% drop in profits until 2020.
Scottish Mortgage Investment Trust’s shares fell more than 5%. The publicly traded trust has significant stakes in major technology stocks, such as Alibaba and Tesla, which have experienced recent declines in share prices.