London open: FTSE back above 7,000 as travel stocks rally

London equity markets rose in early trade on Tuesday, with the FTSE 100 back above 7,000 as travel stocks paced the advance.

At 0905 BST, the FTSE 100 was up 0.6% at 7,011.71 as traders returned to their desks after the Bank Holiday weekend.

Neil Wilson, chief market analyst at Markets.com, said: "The reopening in the US and UK continues apace. More states are opening up bars, restaurants and other hospitality venues at full capacity, whilst Britons are set to resume international travel this month and get back in the pub too.

"Europe is catching up fast on vaccinating its population and will be at a similar level by the summer. The vaccines are working. Stimulus is also supporting spending as US personal incomes soared by 21% last month."

Travel stocks were the best performers after the EU said on Monday that it will allow holidaymakers from countries with low coronavirus infections, such as the UK, and fully vaccinated tourists from June.

Wilson said: "Talks on the plans begin today. Whilst progress is slow, there is hope that by the summer holidays travel will be substantially more possible."

Russ Mould, investment director at AJ Bell, said sentiment was also being underpinned by "chatter about a commodities supercycle".

British Airways and Iberia owner IAG rallied, with the added boost of an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan. The bank said that while 2021 is expected to remain very challenging, the prospects for 2022 onwards "look promising as global air travel starts to normalise".

"We anticipate turbulence on this journey but consider IAG an attractive long-term investment," JPM said.

Premier Inn owner Whitbread, budget airline easyJet and travel company Tui were also high risers.

Shopping centre owners British Land and Land Securities advanced amid brightening prospects, after the reopening of non-essential stores.

Elsewhere, Mike Ashley’s Frasers Group gained after saying it was starting a share buyback of up to £60m to reduce its share capital.

WH Smith was in the black following reports it is considering moving its new gadget chain InMotion to the airport stores left behind by Dixons Carphone.

On the downside, online electricals retailer AO World and Just Eat Takeaway - both of which have benefitted from Covid restrictions and lockdowns - were on the back foot.

Doorstep lender Provident Financial slumped as it that a review of its consumer credit division is nearing completion and the outcome will be announced with its full-year results next week.

Market Movers

FTSE 100 (UKX) 7,011.71 0.60%
FTSE 250 (MCX) 22,552.41 0.24%
techMARK (TASX) 4,365.52 0.12%

FTSE 100 - Risers

Fresnillo (FRES) 851.40p 3.38%
International Consolidated Airlines Group SA (CDI) (IAG) 208.55p 2.84%
Polymetal International (POLY) 1,531.00p 2.37%
Land Securities Group (LAND) 736.40p 2.16%
Whitbread (WTB) 3,314.00p 2.16%
Royal Dutch Shell 'B' (RDSB) 1,324.40p 1.96%
Royal Dutch Shell 'A' (RDSA) 1,391.60p 1.95%
British Land Company (BLND) 528.40p 1.93%
BP (BP.) 308.65p 1.86%
BHP Group (BHP) 2,221.50p 1.69%

FTSE 100 - Fallers

Pearson (PSON) 812.00p -2.17%
Aveva Group (AVV) 3,406.00p -2.13%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,347.00p -1.97%
Weir Group (WEIR) 1,888.50p -1.49%
Intermediate Capital Group (ICP) 2,155.00p -1.42%
Ocado Group (OCDO) 2,069.00p -1.34%
HSBC Holdings (HSBA) 447.15p -1.25%
Renishaw (RSW) 6,190.00p -1.20%
Sage Group (SGE) 632.60p -0.85%
Johnson Matthey (JMAT) 3,225.00p -0.77%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 449.80p 4.43%
Syncona Limited NPV (SYNC) 245.50p 3.37%
easyJet (EZJ) 1,070.00p 3.28%
Cairn Energy (CNE) 175.30p 3.24%
Frasers Group (FRAS) 530.00p 2.81%
Cineworld Group (CINE) 99.00p 2.34%
Hammerson (HMSO) 40.76p 2.31%
FirstGroup (FGP) 76.00p 2.29%
Wood Group (John) (WG.) 288.00p 2.27%
Petropavlovsk (POG) 26.24p 2.18%

FTSE 250 - Fallers

Provident Financial (PFG) 237.00p -3.19%
Elementis (ELM) 145.50p -2.74%
Baillie Gifford US Growth Trust (USA) 322.50p -2.42%
AO World (AO.) 271.40p -2.37%
AJ Bell (AJB) 433.60p -2.34%
JTC (JTC) 659.00p -2.08%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,347.00p -1.97%
Wickes Group (WIX) 245.50p -1.78%
BMO Global Smaller Companies (BGSC) 165.60p -1.78%
Edinburgh Worldwide Inv Trust (EWI) 352.00p -1.68%