Markets live: Travel stocks drag down FTSE 100 as UK quarantine hits France
The FTSE 100 opened in the red this morning as the UK’s decision to add France to its quarantine list weighed down travel stocks.
The blue-chip index was trading 1.29 per cent lower at 6,105 points shortly after markets opened.
Travel stocks tumble
Travel stocks dragged the FTSE lower this morning following the government’s announcement that all travellers returning to the UK from France, Malta and the Netherlands must quarantine for 14 days.
IAG and Ryanair were both trading down more than four per cent, while Tui and Easyjet were down five and six per cent respectively.
Neil Wilson, chief market analyst at Markets.com, warned the move would “force a large swathe of cancellations right at the peak of the summer holiday season for one of the largest markets for UK tourists”.
The announcement also had a knock-on effect on related stocks such as airport stalwart WHSmith, which fell almost five per cent.
“Apart from the immediate damage this will do at the height of the school holidays and peak summer season, the quarantine decision also underlines the inherent risk you take in booking a holiday abroad right now, which will do nothing for consumer confidence,” Wilson added.
|Intercontinental Hotels Group||-3.15|
But Michael Hewson, chief market analyst at CMC Markets, said the “over-riding mood remains cautiously upbeat from an economic data point of view”.
“It’s also important to remember that for all of the weakness of the last 24 hours that markets here in Europe remain on course for their second successive weekly gain, despite some anxiety about rising infection rates across various parts of Europe, as well as here in the UK.”
However, stocks elsewhere in Europe also felt the impact of the new quarantine rules.
France’s Cac 40 dropped 1.36 per cent to 4,972 points, while German Dax slipped 0.92 per cent to 12,874.
Chinese data disappoints
Markets have also been rattled by a shock fall in Chinese retail sales in July, suggesting the country is still feeling the impact of the coronavirus outbreak.
Industrial production rose 4.8 per cent last month, though this was also behind expectations.
“Though an improvement on June’s -1.8 per cent, July’s -1.1 per cent reading marked the second month in a row that retail sales in the country had failed to climb back into positive territory as expected,” said Connor Campbell, financial analyst at Spreadex.
“Combine that with an industrial production reading that remained unchanged at 4.8 per cent, missing the forecast 5.1 per cent, and there are signs of a stalling recovery in the superpower.”
Asian stocks stumbled in this morning’s session on the back of the weak data.
Wall Street last night closed lower after better-than-expected jobless claims data failed to offset jitters over the lack of progress on a US stimulus package.
It was also a lacklustre day for the FTSE 100, which took its cue from faltering US confidence and felt the impact of a slate of stocks going ex-dividend.