FTSE 100 movers: Travel stocks rally; Polymetal loses its shine
By Michele Maatouk
Date: Friday 05 Jun 2020
(Sharecast News) - London's FTSE 100 was up 2.1% at 6,475.38 in afternoon trade on Friday after a better-than-expected US non-farm payrolls report.
Travel-related stocks were the standout gainers, with cruise operator Carnival, British Airways parent IAG and Premier Inn owner Whitbread all firmly in the black.
IG said: "It has been a big week for the travel sector, with the prospect of a surge in travel for July boosting sentiment amid a flight to value over recent days. With the likes of IAG, Carnival, and easyJet leading the FTSE 100 higher, we are continuing to see traders favour those heavily-hit stocks in a bid to find returns given the outperformance within growth stocks."
Citi said in a note that Whitbread's competitive position in the branded UK budget hotel market is to improve significantly post Covid-19, as leasehold model competitors and independent hoteliers will experience far greater operational deleverage from poor trading. It estimated that Whitbread will have £2.7bn of liquidity at end of the first half of 2021.
"The rights issue was not required for immediate liquidity, but it should ensure WTB comes through Covid-19 with the balance sheet strength to enhance its competitive position," it said.
On the downside, precious metals miners Polymetal and Fresnillo lost their shine as gold prices tanked after the payrolls report.
Oanda analyst Edward Moya said: "Gold traders rushed for the exits after they were stunned by the robust non-farm payroll report. It will be hard for the Fed to remain extremely accommodative if the world's largest economy is already in recovery mode.
"Gold might not get much more support from the Fed, but geopolitical risks, second wave concerns, and an eventually weaker US dollar should keep the longer-term bullish outlook intact."
FTSE 100 - Risers
Carnival (CCL) 1,416.50p 18.59%
International Consolidated Airlines Group SA (CDI) (IAG) 322.70p 11.97%
M&G (MNG) 168.60p 11.84%
Melrose Industries (MRO) 143.85p 11.17%
Whitbread (WTB) 2,764.00p 9.47%
Intermediate Capital Group (ICP) 1,401.00p 9.37%
Royal Bank of Scotland Group (RBS) 137.30p 8.37%
Meggitt (MGGT) 367.80p 8.30%
Rolls-Royce Holdings (RR.) 349.70p 7.93%
Prudential (PRU) 1,261.00p 7.69%
FTSE 100 - Fallers
Polymetal International (POLY) 1,420.00p -5.14%
Pennon Group (PNN) 1,092.00p -3.70%
Hikma Pharmaceuticals (HIK) 2,311.00p -3.39%
Ocado Group (OCDO) 2,064.00p -3.37%
London Stock Exchange Group (LSE) 8,006.00p -3.19%
Fresnillo (FRES) 733.20p -3.12%
National Grid (NG.) 919.60p -2.56%
Reckitt Benckiser Group (RB.) 6,858.00p -2.56%
Relx plc (REL) 1,888.50p -2.38%
United Utilities Group (UU.) 919.40p -1.77%
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