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Europe open: Travel stocks hit on Delta variant worries

By Frank Prenesti

Date: Monday 19 Jul 2021

Europe open: Travel stocks hit on Delta variant worries

(Sharecast News) - European shares opened lower on Monday, led by travel and energy stocks as investors fretted about the rising number of Delta variant Covid cases globally.
The pan-European STOXX 600 index fell 1.5%, Germany's DAX dropped 1.4% and France's CAC 40 declined 1.62%. Britain's FTSE 100 was down 1.4% as England's total reopening was overshadowed by a spike in cases.

"Inflation was the big story last week and remains the big question mark hanging over markets. Consumer expectations have shot higher - the University of Michigan released its report on Friday showing consumers think prices will rise 4.8% over the next year," said Neil Wilson at Markets.com.

Travel and leisure stocks were in the red after the UK government on Friday it was scrapping a planned relaxation of Covid-19 quarantine rules for travellers from France.

Cruise line company Carnival fell to the bottom of the Stoxx, down almost 8%, while airlines easyJet, Wizz Air and British Airways-owner IAG all fell more than 5%.

"The confusion surrounding quarantine and testing rules for international travel is also leading to fresh uncertainty about the prospects for the aviation and tourism industries, which have been struggling through the worst crisis in their history," said Hargreaves Lansdown analyst Susannah Streeter.

"The lack of warning about the need for travellers from France to isolate for 10 days from today, has thrown holiday plans into fresh mass chaos, with hopes of a boost to summer bookings evaporating. Amidst concerns that infection rates could derail the recovery are worries about inflation heating up and the knock on effect of rising interest rates."

Related stocks were also lower, with InterContinental Hotels, Premier Inn owner Whitbread, Accor Hotels, engine maker Rolls-Royce, Cineworld, and Upper Crust owner SSP all weaker.

Oil majors were lower as crude prices fell after OPEC+ agreed to boost output.

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