London close: Tourism plays lead slump amid travel restriction fears

(Sharecast News) - London stocks closed further into negative territory on Monday, with travel and leisure firms under the cosh.
The FTSE 100 ended the session down 0.88% at 7,072.97, and the FTSE 250 was 0.5% weaker at 22,533.42.

Sterling was in the green, meanwhile, last trading 0.06% stronger on both the dollar and the euro at $1.3887 and €1.1637, respectively.

"[The travel sector saw] falls at the end of last week over disappointment over the limited government relaxation of travel restrictions, which saw the addition of Malta, Madeira and the Balearics to the green list," said CMC Markets chief market analyst Michael Hewson.

"Airlines were also unhappy that the government wasn't bolder in promising that it would look at dropping quarantine rules for fully vaccinated UK residents returning home from amber list countries."

Hewson said that, while airlines and travel companies expressed disappointment over that announcement, criticising the government for its cautious approach, the reality was that whatever countries the government adds to the green list mattered less than the restrictions being faced by UK passengers when they leave for their destination country.

"Airlines can huff and puff all they like - the reality is the UK government could have put a much higher number on its green list.

"But unless that list is reciprocated then passengers are still going to face pretty significant obstacles to travel, and sadly no amount of complaining about it will change that fact."

Data released earlier showed footfall across all retail destinations as largely flat last week, with changing weather conditions keeping consumers away.

According to retail consultancy Springboard, footfall was down 0.2% week-on-week in the seven days beginning 20 June, and within that, retail parks recorded a 2.0% fall, while high streets and shopping centres recorded rises of 0.2% and 0.6%.

Year-on-two-year - used to strip out the impact of the Covid-19 lockdowns in 2020, footfall across all UK destinations was 25.3% lower.

"Variable weather meant that footfall remained virtually level with the week before, albeit with slight variations between urban locations of high streets and shopping centres, where footfall rose marginally, and retail parks, where there was a slight decline in activity," said Diane Wehrle, Springboard's insights director.

"Footfall shifted from day-to-day, but overall, the first part of the week was more heavily impacted than the remaining four days."

In equity markets, travel stocks were under intense pressure as Germany pushed the European Union to designate the UK a "country of concern" and introduce strict quarantine measures for British travellers.

German chancellor Angela Merkel was reportedly pushing the proposal, which would apply regardless of the vaccination status of travellers, as the Delta variant is now so widespread in the UK.

European officials were set to discuss the proposal this week.

A government source told the Times that Merkel was "increasingly isolated" among EU leaders on the matter.

InterContinental Hotels was down 3.03%, British Airways owner IAG descended 5.92%, Premier Inn owner Whitbread lost 3.01%, Upper Crust owner SSP slid 4.94%, travel company TUI was 5.3% weaker, and budget airlines easyJet and Wizz Air sank 5.8% and 5.44%.

"EU leaders are preparing to meet this week and Germany's Angela Merkel is hoping to gain approval for a consensus on quarantine to stop the spread of the Delta variant," said Susannah Street, senior investment and markets analyst at Hargreaves Lansdown.

"So, it's looking increasingly likely this summer will be a wash out for the industry after all."

Luxury fashion brand Burberry fell 8.67% on news that chief executive officer Marco Gobbetti was planning to step down at the end of the year to take up the role of CEO at Italy's Salvatore Ferragamo.

Ultra Electronics slumped 2.96% after the aerospace and defence group said it had terminated "very early stages" of exploratory talks with Cobham about a possible combination of some of their units.

The shares rallied sharply on Friday on news of a possible deal.

On the upside, high street pastry peddler Greggs rose 2.89% after it reported a stronger-than-expected recovery in sales from the Covid-19 pandemic since 10 May, with like-for-like growth of 1% to 3% against the same period in 2019 before the crisis began.

In broker note action, Dr. Martens was boosted 1.91% by an upgrade to 'buy' at HSBC, but St. James's Place was hit by a downgrade to 'hold' by the same outfit, closing down 1.63%.

Market Movers

FTSE 100 (UKX) 7,072.97 -0.88%
FTSE 250 (MCX) 22,533.42 -0.50%
techMARK (TASX) 4,453.39 -0.56%

FTSE 100 - Risers

AstraZeneca (AZN) 8,666.00p 1.96%
Ocado Group (OCDO) 2,019.00p 1.71%
Avast (AVST) 500.80p 1.62%
Rentokil Initial (RTO) 501.00p 1.33%
British American Tobacco (BATS) 2,819.00p 1.17%
Scottish Mortgage Inv Trust (SMT) 1,312.50p 1.00%
B&M European Value Retail S.A. (DI) (BME) 565.00p 0.82%
Severn Trent (SVT) 2,525.00p 0.76%
Hikma Pharmaceuticals (HIK) 2,434.00p 0.62%
Berkeley Group Holdings (The) (BKG) 4,662.00p 0.60%

FTSE 100 - Fallers

Burberry Group (BRBY) 2,055.00p -8.67%
International Consolidated Airlines Group SA (CDI) (IAG) 176.88p -5.65%
Rolls-Royce Holdings (RR.) 101.10p -5.07%
British Land Company (BLND) 498.90p -3.84%
Royal Dutch Shell 'B' (RDSB) 1,398.00p -3.59%
Flutter Entertainment (CDI) (FLTR) 13,275.00p -3.49%
Royal Dutch Shell 'A' (RDSA) 1,444.40p -3.35%
Land Securities Group (LAND) 674.80p -3.32%
BP (BP.) 315.15p -3.18%
Whitbread (WTB) 3,097.00p -3.10%

FTSE 250 - Risers

Crest Nicholson Holdings (CRST) 429.60p 4.32%
Hiscox Limited (DI) (HSX) 879.00p 3.53%
HGCapital Trust (HGT) 349.50p 3.40%
Beazley (BEZ) 338.70p 2.98%
Greggs (GRG) 2,633.00p 2.85%
Premier Foods (PFD) 109.00p 2.64%
Drax Group (DRX) 435.00p 2.55%
Biffa (BIFF) 323.00p 2.22%
Pets at Home Group (PETS) 464.80p 1.97%
Kainos Group (KNOS) 1,487.00p 1.85%

FTSE 250 - Fallers

Cairn Energy (CNE) 153.40p -5.77%
easyJet (EZJ) 902.60p -5.49%
Playtech (PTEC) 442.80p -5.47%
Wizz Air Holdings (WIZZ) 4,745.00p -5.44%
TUI AG Reg Shs (DI) (TUI) 384.10p -5.30%
SSP Group (SSPG) 276.60p -5.08%
National Express Group (NEX) 264.80p -5.02%
Trainline (TRN) 285.20p -3.97%
Capital & Counties Properties (CAPC) 160.20p -3.96%
Energean (ENOG) 740.00p -3.65%