A glimmer of hope on the FTSE
Fiona Cincotta March 20, 2020 11:17 AM
A glimmer of hope on the FTSE from an unexpected quarter: tourism and travel.
A glimmer of hope on the FTSE from an unexpected quarter: tourism and travel. InterContinental Hotels Group updated the markets about its operations and although much of the update was what investors would have expected under the current circumstances, like a 60% drop in per-room revenue in March, what captured attention is that hotel room demand in China is beginning to improve for the first time since the virus started spreading in January.
The stock, which is one of the FTSE’s most even-keeled ones with very few spikes and troughs during the course of a year, has bounced 13% this morning. It has some way to go to make up a 53% drop in January but with China beginning to recover from the pandemic investors looking for very oversold stocks are now starting to consider travel shares. Tour specialist TUI is beginning to turn the corner for the same reasons.
Banks mixed after stress test cancelled
The Bank of England is continuing with a series of moves to support businesses and banks through this crisis. After last night’s decision to cut rates even further to a bare minimum of 0.1% and a promise of a £200 billion bond programme, the BoE also decided that banks will not have to meet a stress test this year given the pressure they are likely to come under as businesses struggle to survive. Banks stocks showed only a mild reaction with Lloyds and Barclays nudging higher, HSBC flat and RBS trading lower.
Brent crude has bounced back above $30 overnight in reaction to the US deciding to buy more oil for its emergency stockpile. President Trump has also said that he would intervene in the dispute between Saudi Arabia and Russia over the overproduction of oil at the right time, lending oil some more support.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.