European stocks hit new high but airline stocks take a knock

Investors avoid travel shares over Delta variant concerns

Bank of Ireland retreated 1.49 per cent to €4.353.

Bank of Ireland retreated 1.49 per cent to €4.353.

 

European stocks hit new highs on Monday, but airline and travel shares took a hit as fears grew that Covid-19’s delta variant would become region’s dominant strain.

Dublin

Ryanair Holdings fell 1.36 per cent to €15.985 as investors swerved airline and travel shares on Monday on concerns that the delta variant could disrupt re-opening and recovery in Europe.

The fall was in line with other European airlines but less severe than the declines experienced by the London-listed carriers, including rival Easyjet, which was down more than 3.6 per cent.

Ryanair announced on Monday that it would hire 2,000 new pilots as it took delivery of new Boeing jets.

Dealers said that weakness in leading stocks such as Ryanair and low volumes left the Irish market trailing those in Europe on Monday. “We’re definitely in a summer lull,” remarked one.

AIB inched up almost half a percent to €2.09. Bank of Ireland retreated 1.49 per cent to €4.353.

Hibernia Real Estate Investment Trust (Reit) provided one of the better performances, climbing 2.48 per cent to €1.32. Landlord Irish Residential Properties Reit added 1.13 per cent to €1.618.

London

Vaccine maker Astra Zeneca got a shot in the arm as Thailand announced that it would use the Anglo-Swedish pharma group’s jab as a second does to augment the Sinovac product it has been using.

Shares in the group climbed 1.3 per cent to 8,762 pence sterling, helping to prop up London’s blue chip FTSE 100 index.

Aer Lingus and British Airways owner, International Consolidated Airlines’ Group (IAG) tumbled 4.24 per cent to 177p as fears about rising delta variant numbers left the sector out of favour with investors.

Low-cost carrier, Easyjet, a key competitor of Irish giant, Ryanair, fell 3.62 per cent to 899.6p on the same concerns.

“There still seems to be a great deal of uncertainty prevailing over the rate of increase in Delta variant cases, and the prospect of a much slower re-opening process, as governments try to win the race between vaccines and accelerating case numbers,” said Michael Hewson, chief market analyst at CMC Markets.

News agency Reuters said travel and leisure stocks fell the most in London on Monday.

Daily Mail and General Trust Plc climbed 3.3 per cent to 1,074p after the founding Rothermere family, the leading investor in the publisher, said it was considering taking the group private in a $1.1 billion (€930 million) deal.

Insurer Admiral Group rose 3.94 per cent to 3,244p it was on track for a higher-than-expected first-half profit due to lower motor accident claims during pandemic lockdowns.

The blue-chip FTSE 100 ended 0.1 per cent higher, with non-life insurers, healthcare and real estate stocks gaining the most.

Europe

France’s outdoor advertising company JCDecaux jumped 10.1 per cent to €26.06 after JPMorgan upgraded the stock to “overweight”, citing a sharp rebound in its air passenger numbers.

French IT consulting group Atos slumped 17.9 per cent to €43.28, leaving it languishing at the bottom of the Europe-wide Stoxx 600, after it cut full-year earnings forecast.

Air France KLM shed 1.92 per cent to close at €3.99 as airlines once again felt the brunt of investors’ Covid fears. German carrier Lufthansa slipped 1.31 per cent to €9.92.

The pan-European Stoxx 600 index rose 0.7 per cent and hit 461.10, extending gains from Friday after a tumultuous week. Germany’s DAX also briefly touched a new high of 15,806.900 before closing just below that level.

US

Wall Street’s main indices rose on Monday, with the Nasdaq and the S&P 500 hitting record highs, as investors awaited the start of the second-quarter earnings season and a batch of economic data to gauge the next leg of the equity market.

JPMorgan Chase, Goldman Sachs, Bank of America and other big banks were up ahead of their earnings report starting on Tuesday, while the banking index added 0.9 per cent.

Virgin Galactic Holdings tumbled 12.9 per cent as the space tourism company said it may sell up to $500 million worth of shares, a day after the company completed its first fully. - Additional reporting: Reuters