- FTSE 100 closing price of 7073.12, -0.88%
- Airlines grounded as Merkel puts travel season in doubt
- Burberry falls as CEO jumps ship
- GBP higher after Javid replaces Hancock, Johnson upbeat on reopening
- Oil falls ahead of OPEC+ as Covid cases
- Bitcoin bounces above $35,000
By Samuel Indyk
Investing.com – The FTSE 100 started the week on the back foot as travel stocks declined with summer travel plans in doubt. German Chancellor Merkel is pushing for the EU to adopt a common position on travellers from the UK, effectively banning them from entering the bloc, even if they are fully vaccinated. Spain was said to be against the plans at the EU summit but may support Merkel’s position if the Delta variant begins to spread through Europe.
IAG (LON:ICAG), EasyJet (LON:EZJ), Ryanair (LON:RYA) and Wizz Air (LON:WIZZ) all posted losses, while Rolls-Royce (LON:RR) shares also declined. Tour operators Tui (LON:TUIT) and Jet2 (LON:JET2) also suffered losses as the uncertainty on travelling is likely to put passengers off booking holidays any time soon.
“The market was disappointed that Burberry chief executive Marco Gobbetti is stepping down,” said AJ Bell Investment Director Russ Mould. “That shows how much he is credited with the success of the luxury goods business.”
GBP was one of the best performing major currencies, rising against the USD and EUR after the UK Prime Minister Boris Johnson appointed Sajid Javid as health secretary, replacing the disgraced Matt Hancock. Hancock was forced to resign over the weekend due to breaking social distancing guidelines when he was pictured kissing an aide inside his office when the 2-metre rule was supposed to be observed.
Javid is expected to be much more open to easing restrictions than Hancock, who was notably cautious about reopening sooner rather than later. Javid, a former chancellor of the exchequer, said he wants a see a return to normal “as quickly as possible”.
“A gradual increase in supply, similar to the level of increases that we have observed throughout the summer, could boost prices even higher,” writes StoneX Energy Economics Analyst Kevin Solomon. “But an increase in excess of 0.75mln barrels per day could perhaps spur some weakness into the oil complex.”
Cryptocurrencies staged a rebound on Monday after some regulation-induced selling over the weekend. The UK’s Financial Conduct Authority announced it had banned crypto exchange Binance from conducting some regulated activities. However, after finding support ahead of $30,000 on Saturday, Bitcoin rebounded back above $35,000 before trading just below there at pixel time. Ethereum was swinging above and below the $2,000 level.
Airlines drag FTSE lower, GBP higher on Javid appointment
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