FTSE 100 shrugs off inflation worries as Boris’ roadmap out of lockdown provides a boost to the trav

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The FTSE 100 defied inflation worries and rising bond yields to claw back some of the ground lost on Monday.

Boris Johnson’s roadmap out of lockdown, while largely trailed in the weekend media, appeared to put a pep in the step of the price-setters of the Square Mile.

That optimism seemed to spill over into travel-reliant stocks, led by the airline IAG (LON:IAG), up 8.5%, with the BBC reporting a surge in holiday bookings in the immediate aftermath of the PM’s announcement.

Following in its vapour trails were jet engine maker Rolls Royce (LON:RR.), which will benefit from an upturn in fortunes for the carriers, and InterContinental Hotels Group (LON:IHG), which were up 6.4% and 4.2% respectively.

On the FTSE 250, easyJet (LON:EZJ) and Cineworld (LON:CINE), up 8.5% and 7.2%, led the resurgence. Boris’ pub re-opening schedule, meanwhile, didn’t curry favour with investors of Mitchells & Butlers (LON:MAB), down 3%.

HSBC (LON:HSBA) was static after its Asian pivot had been widely leaked to the ‘Sundays’; however, the restoration of the dividend did provide a tonic for Natwest (LON:NWG) and Lloyds (LON:LLOY), up 2.7% and 2% respectively.

6.50 am: Positivity in the air

The FTSE 100 is expected to recover its small losses from the start of the week after the Prime Minister’s speech about emerging from the current coronavirus lockdown.

London’s blue-chip share index is being predicted to rise around 16 points by spread-betters on the IG platform, a day after slipping just under 12 points or 0.2% to 6,612.24.

Overnight, US stock market indices mostly fell, though the Dow Jones battled over the line to add 27 points or 0.1% to close at 31,521.69.

The S&P 500, however, slid 0.8% and the tech-heavy Nasdaq Composite tumbled 2.5%, with all but one of the top 20 largest companies all moving lower, with the biggest being an 8% decline for Tesla Inc (NASDAQ:TSLA).

“European markets got the week off to a disappointing start on increasing concern about rising bond yields, and what they are telling us about the economic outlook, and the prospects for inflation,” said market analyst Michael Hewson at CMC Markets.

“Today’s European open is likely to see a little bit of a rebound after the declines from yesterday, helped by a positive Asia session, and while optimism abounds about an economic recovery, there still seems to be an abundance of caution about when to look at becoming strongly positive about the prospects for UK and European stocks.”

Analyst Jeffrey Halley at Oanda was more dramatic: “Financial markets have an every-man-for-himself look about them today, as various asset classes diverge in their own directions. A combination of tightening yields and the impending two-day testimony by Fed Chairman Powell starting today in Washington DC seems to have provoked differing reactions across different markets.”

Around the markets

Pound: flat at US$1.4067

Gold: up 0.2% at US$1,813.76

Oil: Brent crude up 0.7% at US$66.28

Bitcoin: down 10% to US$50,167.60

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Tuesday as HSBC reported a profit before tax of $8.8 billion for 2020, a fall of 34% from a year ago.

The Hang Seng index in Hong Kong gained 0.95% while the Shanghai Composite in China dipped 0.49%.

In Japan, the Nikkei 225 rose 0.46% while South Korea’s Kospi fell 0.31%.

Shares in Australia gained, with the S&P/ASX 200 closing 0.86% higher.


Proactive Australia news:

Horizon Minerals Ltd (ASX:HRZ) has generated $1.2 million in net cash after completing the fourth and final milling campaign from trial mining at the Boorara Gold Mine, 10 kilometres east of Kalgoorlie-Boulder in the Goldfields of Western Australia.

Tempest Minerals Ltd (ASX:TEM) has increased its landholding at the Messenger Project in Western Australia with a new extension that covers the historic high-grade Messengers Patch gold production area.

Paradigm Biopharmaceuticals Ltd (ASX:PAR) has received more than $3.38 million as a Research and Development (R&D) Tax Incentive refund for the 2020 financial year.

Astro Resources NL (ASX:ARO) has busy work programs planned to advance the Needles Gold Project in the USA as well as the Governor Broome Minerals Sands Project and the Lower Smoke Creek Diamond Project, both in Western Australia.

White Rock Minerals Ltd (ASX:WRM) (OTCQX:WRMCF) has entered into a binding and exclusive term sheet with Thomson Resources Ltd (ASX:TMZ) for a three-stage earn-in and option to a joint venture agreement to progress the Mt Carrington Gold and Silver Project in northeast NSW.

PolarX Ltd (ASX:PXX) (FRA:PX0) is focused on advancing its North American projects at Humboldt Range and Alaska Range this year, aiming to complete due diligence as well as start exploration at both projects.

Maximus Resources Limited (ASX:MXR) (FRA:M5F) has begun drilling at the highly prospective Wattle Dam East nickel target within its Spargoville tenements, 25 kilometres from BHP Group Ltd’s (ASX:BHP) (NYSE:BHP) Kambalda Nickel Concentrator.

Euro Manganese Inc (ASX:EMN) (CVE:EMN) (OTCMKTS:EROMF) (FRA:E06) has secured the support of European Union-backed knowledge and innovation organisation EIT InnoEnergy to accelerate integration of the Chvaletice Manganese Project in the Czech Republic into Europe’s battery supply chain.

Rumble Resources Ltd‘s (ASX:RTR) (FRA:20Z) latest reconnaissance reverse circulation (RC) drilling and mapping program has expanded the large-scale gold-copper-silver system at Amaryllis Prospect within the Munarra Gully Project, Cue in WA’s Mid-West.

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