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(Alliance News) - London stocks recovered somewhat on Wednesday after a brutal previous session, with airlines recouping some of their losses despite the outlook for travel remaining murky.
The FTSE 100 closed up 35.42 points, or 0.5%, at 6,895.29 - after tumbling a hefty 2.0% on Tuesday, the blue-chip index's worst performance since late February.
The FTSE 250 ended down 22.82 points, or 0.1%, at 22,085.73 on Wednesday, and the AIM All-Share closed up 7.7 points, or 0.6%, at 1,245.63
The Cboe UK 100 ended up 0.7% at 687.28, the Cboe UK 250 closed down 0.3% at 19,748.37, and the Cboe Small Companies ended up 0.4% at 14,391.35.
In European equities on Wednesday, the CAC 40 in Paris ended up 0.7%, while the DAX 30 in Frankfurt rose 0.4%.
"After the big declines seen yesterday, European markets have recovered some of their poise today, with the travel and leisure sector looking to find a bit of a base after recent declines," said Michael Hewson, chief market analyst at CMC Markets.
"Airlines were big fallers yesterday with long haul carriers getting hit the hardest, over concerns that extended shutdowns in Asia markets could mean delays to the speedy resumption of long-haul travel...This perhaps helps explain why British Airways owner IAG has found gains much harder to come by today relative to the likes of easyJet," said Hewson.
easyJet shares closed up 3.4% on Wednesday, recovering part of Tuesday's 5.4% slide. However, IAG only recovered 0.4% on Wednesday after an 8.1% tumble in the previous session.
Gains for airlines on Wednesday came despite the International Air Transport Association saying the industry is set to lose USD47.7 billion this year, worse than previously forecast.
The IATA had forecast net post tax losses of USD38 billion in December.
"Financial performance will be worse and more varied this year than we expected in our December forecast, because of difficulties in controlling the virus variants and slower vaccination in some regions," the association said in a report.
North American airlines will fare better than previously thought, with losses of USD5 billion instead of USD11 billion, thanks to the recovery of the domestic market there, the IATA said. But the outlook has worsened in Europe due to a slower vaccination campaign and less easing of international travel restrictions.
Ending at the bottom of the FTSE 100 was Bunzl, shedding 3.2% as it looked to a softer second half.
London-based distribution and services firm Bunzl reported a 5.4% rise in revenue in the first quarter of 2021 and a 10% increase at constant exchange rates, driven by demand for Covid-related products such as personal protective equipment.
Despite expecting organic revenue growth in the first half of 2021, the firm did warn of a "moderate decline" in the second half of the year.
Bunzl expects "robust" revenue growth in 2021 after excluding larger Covid-19 related orders, which contributed around GBP550 million last year. Adjusted operating margin will return to a more historical level in 2021, it said, having been elevated by Covid-19.
Just Eat Takeaway.com fell 2.7% on a report that rival Uber Eats is planning to launch into the German market.
According to the Financial Times, Uber Eats will launch in Germany for the first time over the next few weeks, starting in Berlin, in its biggest entry to a new country since 2018. Just Eat Takeaway has dominated online food ordering in Germany since Deliveroo withdrew from the country in 2019, leaving few competitors of meaningful scale, the FT noted.
Topping the blue-chip index was Smith & Nephew, up 3.7% on a positive read-across from US peer Intuitive Surgical.
Intuitive - a California, US-headquartered firm specialising in minimally invasive care and robotic-assisted surgery - late Tuesday reported first quarter revenue growth of 18%, while net income jumped 28% to USD435.2 million, causing shares to rally 8.5% in New York on Wednesday.
In the FTSE 250, Hochschild Mining rose 5.3% after posting a slight annual slip in first-quarter output, though the gold miner's production was much higher than it was during virus-hit periods of 2020.
Gold equivalent production in the first three months of 2021 fell 7.9% to yearly to around 100,930 ounces. Gold production alone fell 8.9% to 62,310 ounces.
Despite the annual fall, Hochschild flagged a "strong operational recovery from 2020 Covid-19 disruption". First-quarter total gold equivalent output in 2021 was more than double what it was in the second quarter of 2020, one of the periods worst-hit by the pandemic.
Gold shot up on Wednesday, trading at USD1,792.76 an ounce at the London equities close against USD1,776.45 at the close on Tuesday.
"Gold prices have enjoyed a good month, indeed their best so far this year. The slowdown in the yield rally has proved an immense support, and with inflation concerns still very much at the forefront of everyone's minds there has been a revival of gold inflows," said Chris Beauchamp, chief market analyst at IG.
It was also a positive session for oil prices, which edged up. Brent oil was quoted at USD65.90 a barrel at the London equities close Wednesday from USD65.71 late Tuesday.
In the currency space, the dollar pared earlier gains to leave the pound and euro trading broadly flat.
The pound was quoted at USD1.3937 at the London equities close Wednesday, a touch softer than USD1.3940 at the close on Tuesday, with the currency failing to get a lift from strengthening UK inflation.
On an annual basis, UK consumer prices rose 0.7% in March, accelerating from a rise of 0.4% in February. However, the latest reading was just shy of market consensus, cited by FXStreet, for an 0.8% increase.
The euro stood at USD1.2034 at the European equities close Wednesday, unchanged on USD1.2035 at the same time on Tuesday.
Against the safe haven yen, the dollar edged up to JPY108.08 compared to JPY108.03 late Tuesday.
Stocks in New York were in the green at the London equities close, with the DJIA up 0.5%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.6%.
The UK corporate calendar on Thursday has trading statements from housebuilder Taylor Wimpey, online trading platform AJ Bell and Domino's Pizza Group, while miner Anglo American releases production results.
The highlight of Thursday's economic calendar is a European Central Bank decision at 1245 BST, followed by a press conference with President Christine Lagarde at 1330 BST, though no change to policy is expected. Also in focus on Thursday will be the latest US jobless claims figures at 1330 BST.
By Lucy Heming; lucyheming@alliancenews.com
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