Footsie flies as air bridge plan boosts travel stocks
THE FTSE 100 has rallied to its highest level in three months as downtrodden travel stocks continue a comeback.
The blue-chip index pulled further away from its coronavirus lows, rising 2.6pc, or 162.27 points, to 6382.41.
The Footsie has now gained 28pc since late March but remains down 15pc this year.
British Airways owner IAG kept rising – up 11.4pc, or 28.6p, to 279.2p – as the debate around how to unlock air travel continues.
The Government said that it was looking closely at ‘air bridges’, or international corridors, to allow people to travel as safely as possible between specific countries where the risk of contracting coronavirus is low.
Portugal said Britons would be ‘most welcome’, while Italy, which was one of the hardest-hit countries in Europe by the virus, reopened its borders with no quarantine restrictions in a bid to boost its stuttering economy.
Currently, the UK is ordering all international arrivals to self-isolate for two weeks, but is under increasing pressure to relax this approach. The optimism was reflected across Europe, with Germany’s Dax index up 3.9pc, France’s CAC up 3.4pc and Italy’s FTSE MIB up 3.5pc.
Even in the US, where demonstrations against police brutality are ongoing, stock markets were on the rise. Back in the UK, Wizz
Air, the eastern Europe-focused carrier, posted surprisingly strong full-year results, lifting it 6.8pc, or 232p, to 3656p.
Rolls-Royce, which has won a contract with the Government organisation responsible for developing nuclear fusion power, saw shares rally 9.3pc, or 27.8p, to 328.2p. The jet engine maker confirmed last night that it will slash 3,000 jobs across the UK. The firm’s base in Derby will bear the brunt of the job losses, with 1,500 set to be axed. And 700 roles will go at its Renfrewshire plant in Scotland.
Investor optimism extended to the FTSE 250, which was up 2.6pc, or 460.77 points, at 17,897.08.
Simmering global tensions have been an unwelcome backdrop for most businesses during the current health crisis. But for defence specialist Chemring, it has proved a heady combination. The firm revealed strong results for the six months to April, causing its shares to shoot up 26.2pc, or 56p, to 269.5p.
Demand from the US military, and for electronic warfare and cyber-security services in the UK, helped boost revenue by 37pc compared to the same time last year to £191m.
Profit before tax leapt 144pc to £24.2m, and Chemring said it expects the global defence market to remain ‘relatively resilient’ despite Covid-19.
Shopping centre owners have had less luck during the pandemic. But after weeks of being hammered as shops have remained closed, struggling to pay their rent bills, they have started to regain some ground. Hopes that the lockdown on shops will finally end for good next week saw
Hammerson shoot up 24.3pc, or 26.9p, to 137.75p.
The landlord, which owns the Birmingham Bullring and 50pc of designer outlet Bicester Village, has more than tripled in value over the last three weeks. Fellow shopping centre owner
Newriver Reit jumped 25.2pc, or 15.9p, to 79p, and Intu climbed 15.1pc, or 1.3p, to 9.9p.
Brickmakers however were looking a little wobbly, after several months of lacklustre building activity. Ibstock revenue fell 75pc in April and May compared to the previous year, and it is considering axing 375 jobs – or 15pc of its workforce. Shares remained nearflat at 202p.