(Alliance News) -Â London stocks rebounded at the open on Tuesday, with travel and leisure stocks clawing back some losses after a difficult start to the week.
"This may be a time to tread carefully until such time as the [Delta variant] can be stopped in its tracks, thus allowing the full return to some kind of normality – and economic recovery - to resume," said Richard Hunter, head of markets at Interactive Investor.
The FTSE 100 was up 80.67 points, or 1.2%, at 6,925.06 early Tuesday. The blue-chip index slumped 2.3% on Monday.
The mid-cap FTSE 250 index was up 182.42 points, or 0.8%, at 22,123.30 on Tuesday. The AIM All-Share index was up 0.1% at 1,200.44.
The Cboe UK 100 index was up 1.3% at 689.62. The Cboe 250 was up 0.8% at 19,785.97, and the Cboe Small Companies up 0.1% at 14,741.71.
In mainland Europe, the CAC 40 in Paris was up 1.3% while the DAX 30 in Frankfurt jumped 1.0% early Tuesday.
Monday's losers due to worries over surging coronavirus cases across the globe - being travel, leisure and hospitality stocks - were rebounding early Tuesday.
Cinema chain Cineworld topped the FTSE 250, up 5.0%, while Anglo-German tour operator Tui rose by 2.5% and Wagamama-owner Restaurant Group by 1.3%. Lockdown winner Just Eat Takeaway.com was the worst performing blue-chip stock, down 2.2%.
Budget airline easyJet advanced 1.7%. It said it is confident over demand for travel this summer and into autumn, expecting to fly up to 60% of pre-pandemic capacity in the fourth quarter.
easyJet said it maintained a "disciplined approach" to capacity and cash management in the third quarter that ended June 30, with total cash burn reduced to GBP55 million. It managed to maintain net debt broadly flat at GBP2.0 billion and registered a headline pretax loss of GBP318 million, in line with expectations and slimmed from GBP346.8 million a year ago.
The airline is now looking ahead to more relaxed travel rules.
It expects capacity in its fourth quarter to be up to 60% of 2019 levels, up from just 17% in the third quarter.
"We remain confident about demand for travel this summer and into autumn, due to the bookings surges experienced following selective easing of travel restrictions, such as the 400% increase in week-on-week flight bookings seen following the waiving of quarantine for fully vaccinated passengers returning from amber-list destinations," said easyJet, also noting high consumer savings rates and "high balances" of employees' annual leave.
Miners were higher as worries over the global economic outlook eased. Antofagasta rallied 2.8%, Rio Tinto rose 2.0% and Anglo American, which reported a broadly positive interim production performance, gained 1.9%.
For the six months ended June 30, Anglo American posted a 5% rise in copper output to 330,000 tonnes from 314,000 tonnes a year before, driven by stronger results from the Los Bronces and El Soldado mines in Chile.
Diamond production from the group's De Beers business grew 37% year-on-year to 15.4 million carats from 11.3 million carats, on output hikes from Botswana and South Africa, in order to meet stronger demand for rough diamonds.
In the red was Fevertree Drinks, falling 5.5% on AIM as it warned over squeezed margins amid global logistics cost pressures.
Total sales in the half to June 30 amounted to GBP141.8 million, up 36% on a year ago. The UK segment delivered 4% growth, while US sales surged 32% and Europe sales doubled.
However, gross margin in the half was "impacted by significantly elevated costs resulting from the disruption currently impacting global logistics". As a result, the company expects first-half gross margins for the Fevertree brand of around 45% and around 44% inclusive of revenue from GDP's portfolio brands.
Fevertree bought German distributor Global Drinks Partnership a year ago.
Due to the strong start to the year, Fevertree raised its annual revenue guidance to a range of GBP295 million to GBP304 million.
"However, as is being seen in other sectors, growing challenges from COVID-related logistics disruption and associated costs is putting pressure on the group's margins. Consequently, we anticipate gross margins of about 44% for FY21, or 43% inclusive of revenue from GDP's portfolio brands, delivering an Ebitda margin of about 20%," the company said.
For 2020, the AIM-listed stock reported a gross margin of 46.2% and an adjusted earnings before interest, tax, depreciation and amortisation margin of 22.6%.
While the next year should see some margin improvement, Fevertree expects logistic cost headwinds to persist, alongside input cost increases for raw materials and product costs.
The dollar continued to gain ground amid the tepid investor mood.
Sterling was quoted at USD1.3644 early Tuesday, pulling back further from USD1.3677 at the London equities close on Monday. The euro traded at USD1.1777 early Tuesday, down from USD1.1798 late Monday.
Against the safe haven Japanese yen, the dollar rose to JPY109.62 from JPY109.51.
Data from the Statistics Bureau showed Japanese consumer prices started to rise in June. They increased by 0.2% on an annual basis in June, compared to a 0.1% decline in May. Consensus cited by FXstreet had seen prices declining again by 0.1%. On a monthly basis, Japan's consumer price index rose 0.3% in June, unchanged from May.
Gold was quoted at USD1,815.96 an ounce early Tuesday, higher than USD1,807.03 on Monday. Brent oil was trading at USD69.41 a barrel, firm on USD69.23 late Monday.
In Tokyo, the Nikkei 225 index ended down 1.0% on Tuesday. In China, the Shanghai Composite ended down 0.1%, while the Hang Seng index in Hong Kong was down 0.8% in late trade. The S&P/ASX 200 in Sydney ended down 0.5%.
By Lucy Heming;Â lucyheming@alliancenews.com
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