The big winners as risk appetite improves

It is still a long way back for travel stocks, despite surging today on revived hopes of a summer season.

Airlines, travel companies and retailers led a FTSE 100 index resurgence today as investors cheered more signs of progress over the re-opening of global economies.

The improved risk appetite towards pandemic-hit stocks helped BA-owner International Consolidated Airlines Group (LSE:IAG) jump 20%, with low-cost rival easyJet (LSE:EZJ) not far behind.

Their improvement came amid hopes that the summer tourism season might not be lost after all, with Spain saying at the weekend that it will reopen for overseas holidaymakers from July. A potential 9 billion euros bail-out for Lufthansa (XETRA:LHA) from the German government also helped.

Among other travel stocks, cruise ship operator Carnival (LSE:CCL) rose 12% and tour company TUI (LSE:TUI) surged 37% when including the 17% improvement for its Frankfurt listing on Monday.

Despite these gains, it is too early to call a recovery for travel stocks as most in the sector continue to trade in the narrow range they have experienced since mid-March.

IAG shares, for example, are still 64% lower than mid-February, with easyJet down 58%. There is a similar story at civil aerospace engine maker Rolls-Royce (LSE:RR.), whose shares were up 14% at 318.7p compared with 699p in February.

The bounce-back for battered stocks helped the FTSE 100 index reach lunchtime 1.3% higher at 6070, with oil giants BP (LSE:BP.) and Royal Dutch Shell (LSE:RDSB) in positive territory on hopes that they will benefit from increased business activity as economies build up speed.

The prospect of most UK shops reopening from 15 June was reflected in the shares of JD Sports (LSE:JD.) Fashion, Primark-owner Associated British Foods (LSE:ABF) and Next as the trio rose by 6% or more.

There were similar moves outside the top flight, with WH Smith (LSE:SMWH) up 14% to 1,103p and clothing retailer Superdry (LSE:SDRY) 7% stronger. With car showrooms able to reopen from next week, Lookers climbed 8%, Pendragon (LSE:PDG) added 11%, Vertu Motors (LSE:VTU) by 9% and Marshall Motor Holdings (LSE:MMH) up 6%.

The wave of buying also focused on the property sector after estate agent Foxtons (LSE:FOXT) said it expected all its branches to be open from next Monday. Its shares rose 3%, while property services group Countrywide (LSE:CWD) improved 7% and online portal Rightmove (LSE:RMV) surged 8%.

Transport was the other sector to watch after the UK government announced a further £254 million for buses and £29 million for trams and light rail to help increase the frequency and capacity of services in England.

Stagecoach (LSE:SGC), which is the UK’s biggest bus and coach operator with major operations in London, Manchester, Liverpool, Newcastle and Hull, welcomed the support. Its shares climbed 11%, while rival Go-Ahead Group (LSE:GOG) rose 9%, National Express Group (LSE:NEX) lifted 7%, and FirstGroup (LSE:FGP) added 5%.

Away from pandemic-related news, Aston Martin Lagonda (LSE:AML) shares got a much-needed boost after the luxury car maker announced the appointment of Tobias Moers as chief executive from August. He spent more than 25 years in senior roles at German car giant Daimler and has been CEO of Mercedes-AMG since October 2013.

Moers has been brought in by Formula One motor racing financier Lawrence Stroll, who recently took a 25% stake in the company as part of a £536 million capital raising. His turnaround plans include the launch of an Aston Martin F1 team from next year.

The debt-laden company recently recorded first-quarter losses of £119 million following a 60% slide in revenues. Shares fell this month to as low as 30p from the 1,900p seen at its 2018 IPO, but with Moers set to replace Dr Andy Palmer at the helm they surged 31% to 46.5p today.