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What to Watch: Travel sell-off continues, oil rallies, and Bellway revives dividends

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Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·4-min read
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A protester wearing a mask holds a placard at Plaza de la Constitucion square during the demonstration in Malaga, Spain. Employees from S.O.S Souvenirs association who work in tourists souvenir stores, demand that the Spanish government ensures the survival of this industry. Photo: Jesus Merida/SOPA/LightRocket via Getty
A protester wearing a mask holds a placard at Plaza de la Constitucion square during the demonstration in Malaga, Spain. Employees from S.O.S Souvenirs association who work in tourists souvenir stores, demand that the Spanish government ensures the survival of this industry. Photo: Jesus Merida/SOPA/LightRocket via Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Travel sell-off continues

Travel stocks looked set for another day of selling on Wednesday as investors wager that the summer holiday season could be cancelled.

Travel stocks sunk on Tuesday as Germany extended its lockdown until 18 April and the UK introduced fines of up to £5,000 for anyone travelling abroad.

"The extended lockdown in Germany, and Boris Johnson’s claim he has ‘no doubt’ that the third wave will hit British shores, has kept the markets, if not panicked, then in a state of quiet concern," said Connor Campbell, a financial analyst at SpreadEx.

British Airways-owner IAG (IAG.L) fell 1.3% in London on Wednesday, easyJet (EZJ.L) fell 0.5%, and engine maker Rolls-Royce (RR.L) dropped 2%. Lufthansa (LHA.DE) was down 1.4% in Frankfurt.

European stocks under pressure

European stocks were weak at the open amid continued concerns about a third wave of COVID-19 sweeping the continent and reports on a looming EU block on vaccine exports.

The FTSE 100 (^FTSE) fell 0.7% at the open in London, while the CAC 40 (^FCHI) and the DAX (^GDAXI) both dropped 0.9% on the continent.

The New York Times reported late on Tuesday that the European Union was drawing up plans to block exports of COVID-19 vaccines for six weeks. The report cited draft legislation due to be published on Wednesday. The paper said the move was likely to "disrupt supply to Britain."

The looming export ban comes amid a row between the EU and AstraZeneca over fulfilment of Europe's order of vaccine. The EU believes AstraZeneca (AZN.L) is unfairly rerouting jabs made within the bloc to Britain.

Oil finds support

Oil prices rallied after a sharp sell-off in the last session.

Oil futures dropped as much as 6% on Tuesday amid concerns that the COVID-19 third wave could lead to oversupply in the market.

Prices rallied on Wednesday. Brent futures (BZ=F) were up 2.2% to $62.12 and crude futures (CL=F) were 2.2% higher to $59.05.

News broke overnight that Egypt's Suez canal had been blocked after a gust of wind knocked a shipping container off course, leaving it wedged sideways in the channel.

Jim Reid, a senior strategist at Deutsche Bank, said the blockage "could have an impact on movement of oil and consumer goods". The Suez canal is one of the busiest and most important shipping routes in the world.

Bellway revives divi

House builder Bellway (BWY.L) has reinstated its dividend after the recent lockdown property boom helped it reach record house sale revenues.

Bellway announced a 35p interim dividend as it said half year revenues rose 11.6% to to £1.7bn — a record high.

Pre-tax profit slipped 4% to £280m. The builder was hit by £20m in costs related to cladding.

"Sales rates were more pronounced in the Summer and early Autumn, given the pent-up demand arising from the Spring national 'lockdown'," chief executive Jason Honeyman said. "The reservation rate slowed during November, as the sector transitioned to the new Help-to-Buy rules and more widespread 'lockdown' measures were reintroduced.

"Despite the escalation of these 'lockdown' measures in the new calendar year, sales rates recovered to a more normalised level for the remainder of the trading period, boosted by the effective transition to the new Help-to-Buy scheme, which has been well received by our customers."

Shares dropped 2%.

WATCH: What is bitcoin?

Bitcoin scores Tesla boost

The price of bitcoin spiked on Wednesday morning after Elon Musk said the cryptocurrency could now be used to buy Tesla (TSLA) electric vehicles.

"You can now buy a Tesla with Bitcoin," Musk wrote on Twitter shortly after 7am UK time on Wednesday.

Billionaire Musk said bitcoin would be accepted in the United States and "will be retained as Bitcoin, not converted to fiat currency."

Bitcoin was up 3% against the dollar to $55,444.21 (BTC-USD) shortly after the tweet.

UK inflation undershoots

UK inflation dropped unexpected in February, according to official data, as retailers slashed clothing and footwear prices to try and shift excess stock.

The Office for National Statistics (ONS) said annual consumer price inflation was 0.4% in February, falling from 0.7% in January. Economists had forecast a rise to 0.8%.

Falling prices for clothing, second-hand cars, and games acted as a downward drag on inflation last month, while fuel and housing costs rose.

WATCH: What is inflation and why is it important?