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FTSE 100 latest: airline and pub shares lift as markets taste Freedom Day

·2-min read
 (Alamy Stock Photo)
(Alamy Stock Photo)

Boris Johnson’s Freedom Day plans had the biggest impact on airline stocks today as more far-flung destinations moved into view for fully-vaccinated sunseekers.

The light at the end of the tunnel for the beleaguered industry helped shares in British Airways and Iberia operator IAG to jump 3% or 6.3p to 195.3p, extending the rally since last Wednesday to 16%.

The surge came as the Prime Minister signalled that travellers who have had both vaccine doses won’t have to quarantine on their return from amber list countries, which account for the bulk of the destinations under the government’s traffic light system.

Transport secretary Grant Shapps is due to set out further details later this week. In the FTSE 250 index, low-cost airline easyJet rose by 2% or 18.2p to 971.4p and has now improved by 11% since hitting a four-month low last week.

Stocks in the hospitality industry paused for breath after being boosted yesterday by speculation over the relaxation of coronavirus restrictions planned for July 19. Cineworld was among those giving up gains, falling 0.8p to 86.7p.

One reason for caution around the re-opening trade has been concern over the impact of staff shortages and rising food input costs.

This is reflected in a 7% fall in Liberum’s leisure index since early May, although analysts at the City firm are confident that this represents a buying opportunity.

They expect labour market pressures to ease over the second half as the furlough scheme is tapered and for much of the food inflation to be offset by mitigation measures.

“There remains scope for earnings upside from demand recovery and improved efficiencies.”

Liberum’s chosen leisure picks are City Pub Group, Gym Group, Loungers, Restaurant Group and bowling firm Ten Entertainment.

Property landlords should be among the other re-opening beneficiaries, but there was no uptick for British Land and Land Securities today after Jefferies removed its buy recommendations on both stocks.

Their shares fell 12.2p to 510p and 13.8p to 690.80p respectively, in a session when the FTSE 100 index was 5.85 points lower at 7,158.67. The FTSE 250 index dipped 18.26 points to 23,003.79.

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