Bad breaks
Spectre of fresh lockdowns abroad kills holiday spirit for investors
IN MORE normal times, this week should have been the start of the summer holiday season. But with Barcelona among popular locations facing the possibility of a return to lockdown in the next fortnight, there were few signs of getaway optimism today.
Shares in airline, hotel and leisure companies were again squeezed on the London market, with investors increasingly nervous after a surge in coronavirus cases over the weekend.
Low-cost airline easyJet saw its shares fall 2% to 647.4p, while International Airlines Group was down 3% to 212.7p. The pressure on the British Airways owner reflected the increasingly worrying global picture, with Hong Kong this weekend reporting the biggest spike in cases since the start of the pandemic in January.
The flight from risk also meant GKN owner Melrose Industries, which makes parts for Airbus, was down 2% at 114.1p. Oil majors BP and Royal Dutch Shell were both down by 2%, meaning the FTSE 100 index opened the week 21.13 points lower at 6269.17.
The domestic focused FTSE 250 index was more robust, down just 9.01 points at 17,338.92. The second tier’s best performing stock was Future, with the magazine, website and events company seeing shares jump 12% to 1360p after a robust trading update.
The group, whose 220 brands include Country Life, FourFourTwo and Guitar World, has seen lockdown accelerate a consumer shift towards digital media.
Underlying earnings for the year to September will be at the top end of market expectations of between £86.3 million and £91 million, compared with £54.5 million last time. Future is also repaying support received from the UK Government’s furlough scheme.
Staffing business SThree, which is focused on STEM roles in science, technology, engineering and mathematics, fell 1% to 269p after detailing the pandemic’s impact in the six months to May 31. Profits slumped 48% to £12.6 million, with net fees down 7% following a drop of 12% in the second quarter.
However, CEO Mark Dorman added: “Talented people with STEM skills will be those solving the problems that businesses are facing, and those are the candidates we place. We are focused on coming out of this period in a strong position.”
Debt-laden Premier Oil was 1% lower at 41p after it signed agreements to buy various BP assets in the North Sea. Premier hopes to complete the acquisitions by September.