London close: Stocks firmly higher as further lockdown easing looms
By Josh White
Date: Tuesday 26 May 2020
(Sharecast News) - London closed firmly in the green on Tuesday, with travel shares pacing the advance as investors welcomed an easing of lockdown measures and travel restrictions.
The FTSE 100 ended the session up 1.24% at 6,067.76, and the FTSE 250 was 3.26% firmer at 16,933.42.
Sentiment received a boost after the news that non-essential shops would be allowed to reopen from 15 June.
Prime Minister Boris Johnson also said on Monday that outdoor markets and car showrooms can reopen from 1 June.
"Travel and airlines stocks are doing well on the back of yesterday's reports that German national carrier Lufthansa is on the brink of a €9bn bailout from the German government, with British Airways owner IAG leading the way, along with decent gains for easyJet and Ryanair," said CMC Markets analyst Michael Hewson.
However, he noted the deal still needs to get the nod from the European Commission, which might impose a number of conditions in return for its approval, including the surrender of key flight slots.
Hopes of a coronavirus vaccine were also helping to underpin the tone after US biotech company Novavax said on Monday that it had begun the first human study of its experimental vaccine.
In addition, news of 'Project Birch', which would see the UK government adopt similar state investments into private businesses as countries such as France and Germany, also lifted the mood.
"With European governments conveniently ignoring EU state aid rules, it is perhaps inevitable that pressure for the UK government to follow suit will grow," said Hewson.
"It is already being reported that a number of big UK employers are knocking on the government's door, including Jaguar Land Rover amidst reports that the UK government is considering a similar response."
Figures released earlier by the Confederation of British Industry showed retail sales remained depressed in May, with the gauge of retail sales rising to -50 from -55 in April.
"The retail sector is at the sharp end of a crisis, with many businesses up against it," said CBI chief economist Rain Newton-Smith.
"The government's support packages are making a real difference, with more shops reporting that jobs have been furloughed, rather than lost.
"The furlough system will need to adapt as more businesses open their doors in the months ahead."
Newton-Smith said that, as the economy gradually reopened, retailers might need more support from the government if demand faltered.
"Ensuring safety in the workplace remains the top priority, as more firms look to bring staff back to work.
"Many challenges remain in managing supply chains and costs in a tough environment."
In equity markets, gains in the travel sector also came after news agency DPA suggested that the German government plans to end a travel warning for tourist trips to 31 European countries from 15 June, and as Spain announced it will lift its 14-day quarantine for overseas arrivals from 1 July.
TUI surged 52.02%, while InterContinental Hotels added 9.27% and cruise operator Carnival was 4.36% firmer.
EasyJet was in focus, rocketing 19.34% higher after chief financial officer Andrew Findlay resigned just days after the airline's founder Stelios Haji-Ioannnou failed to remove him and three other leading board members.
The budget airline said Findlay was expected to work his year's notice while the board looks for a replacement.
Elsewhere, Aston Martin Lagonda rallied 27.92% as it confirmed the departure of chief executive Andy Palmer to be replaced by AMG chief Tobias Moers in August.
Market Movers
FTSE 100 (UKX) 6,067.76 1.24%
FTSE 250 (MCX) 16,933.42 3.26%
techMARK (TASX) 3,712.52 -0.26%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 233.80p 22.54%
easyJet (EZJ) 665.20p 19.34%
Melrose Industries (MRO) 105.95p 13.70%
Carnival (CCL) 1,111.00p 13.18%
Rolls-Royce Holdings (RR.) 314.80p 12.19%
JD Sports Fashion (JD.) 622.40p 10.20%
Whitbread (WTB) 2,451.00p 9.81%
InterContinental Hotels Group (IHG) 3,985.00p 9.27%
British Land Company (BLND) 380.00p 9.20%
Associated British Foods (ABF) 1,824.00p 8.60%
FTSE 100 - Fallers
Hikma Pharmaceuticals (HIK) 2,460.00p -3.98%
AstraZeneca (AZN) 8,672.00p -3.60%
Fresnillo (FRES) 771.80p -2.80%
Polymetal International (POLY) 1,654.50p -2.68%
Rio Tinto (RIO) 4,167.50p -1.95%
Reckitt Benckiser Group (RB.) 6,996.00p -1.91%
London Stock Exchange Group (LSE) 8,272.00p -1.90%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,706.00p -1.80%
Croda International (CRDA) 5,058.00p -1.56%
Morrison (Wm) Supermarkets (MRW) 179.10p -1.46%
FTSE 250 - Risers
TUI AG Reg Shs (DI) (TUI) 458.80p 52.02%
Aston Martin Lagonda Global Holdings (AML) 45.36p 27.92%
Mitchells & Butlers (MAB) 192.20p 26.12%
SSP Group (SSPG) 305.20p 23.96%
Helios Towers (HTWS) 165.00p 20.61%
Cineworld Group (CINE) 69.62p 19.21%
Hammerson (HMSO) 74.36p 17.62%
Signature Aviation (SIG) 249.40p 16.98%
IWG (IWG) 252.00p 16.67%
WH Smith (SMWH) 1,122.00p 16.57%
FTSE 250 - Fallers
Marston's (MARS) 59.05p -10.53%
Centamin (DI) (CEY) 164.40p -8.46%
Softcat (SCT) 1,175.00p -6.52%
Kainos Group (KNOS) 841.00p -5.08%
Hochschild Mining (HOC) 199.80p -4.86%
Petropavlovsk (POG) 25.15p -4.19%
Oxford Instruments (OXIG) 1,182.00p -3.59%
Dechra Pharmaceuticals (DPH) 2,754.00p -3.03%
Plus500 Ltd (DI) (PLUS) 1,294.00p -2.63%
Airtel Africa (AAF) 35.80p -2.45%
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