Shares in tourism and airline businesses slump after UK quarantines travellers from Spain
Tour operator TUI plunges after it cancels UK holidays to Spanish mainland until August 9
UK shares dipped on Monday as a two-week quarantine on all travellers from Spain hammered airline stocks, with simmering US-China tensions and a surge in global Covid-19 cases also sparking a flight from risk assets.
The blue-chip FTSE 100 was down 0.2 per cent, with a 9.2 per cent plunge for British Airways-owner IAG, putting the company on course for its worst day since March. The mid-cap FTSE 250 was off 0.5 per cent.
London-listed shares of Europe's biggest holiday company, TUI, tumbled 11.7 per cent after the company said it had decided to cancel all holidays to mainland Spain through to August 9 following the UK's decision to quarantine travellers.
EasyJet and Carnival were also among the biggest decliners on the FTSE 250, with the wider travel and leisure sector losing 2.4 per cent.
"We had a pretty decent rally (in the past few months) and some of these stocks got a little overbought in anticipation that things are going to get back to normal very smoothly," said Keith Temperton, an analyst at Lombard Forte.
UK stock markets have rebounded sharply from a coronavirus-driven selloff in March as a raft of global stimulus and easing business restrictions fuelled optimism about a swift post-pandemic economic recovery.
But with the relentless surge in global coronavirus infections raising the spectre of another round of lockdowns, investors are betting on more government and central bank stimulus to blunt the business damage from the pandemic.
Mining stocks outperformed the wider FTSE 100 on Monday as hopes of more US coronavirus stimulus drove up London copper prices.
Car makers, banks and aerospace-related stocks were among the biggest decliners.
Antofagasta rose 2.9 per cent to the top of the FTSE 100 as the union of workers at its Zaldivar copper mine in northern Chile told Reuters that it had reached a contract deal with the Chilean-based miner, averting the risk of a walk-off.
Published: July 27, 2020 05:12 PM