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Potential overhaul of traffic light system lifts airline stocks on London’s FTSE

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Speculation that the UK’s international travel restrictions might soon be overhauled sent airlines soaring on Thursday.

According to reports, those who have had two vaccinations might be able to travel without quarantine into all but the worst-hit countries, and avoid costly PCR tests when travelling to the UK.

Traders responded to this speculation on Thursday sending shares in easyJet and Wizz Air close to the top of the FTSE 250.

On the index’s larger cousin, the FTSE 100, British Airways owner IAG and airplane engine maker Rolls-Royce soared.

“The UK’s traffic light system has come in for considerable criticism from both industry bosses and consumers so it’s little wonder the speculation that it’s about to be scrapped has chimed with investors,” said AJ Bell financial analyst Danni Hewson.

“October half-term is the next big opportunity for the travel sector and any changes that can make travelling less unsettling and testing less expensive will yield dividends.

“There are a great many question marks about how far the Government will go, particularly when it comes to changing testing requirements, but even simplification of the basic go, no-go areas will go a long way towards shoring up confidence, particularly amongst families.”

Their rises, and positive movement elsewhere on the index, was enough to offset a terrible performance from the mining sector.

The FTSE 100 rose 11 points to 7,027.48, a 0.2% gain.

The bottom 10 performers on the index included eight mining giants: Anglo American, Rio Tinto, Fresnillo, BHP, Glencore, Antofagasta, Polymetal and Evraz.

The falls were inspired by the rising value of the dollar, which pushed down prices for copper and other metals.

By the end of the day, one pound would buy 1.3765 dollars, a less than 0.1% decrease, dropping similarly against the euro to 1.1704.

In Europe, the Dax in Frankfurt rose 0.3%, while the Cac in Paris closed up 0.6%.

Two major New York indexes, the S&P 500 and the Dow Jones, were both trading down around 0.6% when markets were closing in London.

In company news, retail giant Marks & Spencer has said it will close 11 of its stores in France due to fresh and chilled food supply issues following Brexit.

The group blamed Brexit disruption to exports from the UK to Europe for its decision to shut all franchised shops with partner SFH in France. Shareholders appeared slightly concerned, with shares dropping 2.1%.

High street fashion brand Superdry reported a pre-tax loss of £36.7 million for the year to April 24, compared with a £166.9 million loss a year earlier.

Revenues slipped by 21.1% to £556.1 million for the year as it was disrupted by further lockdowns across key regions, but bosses said they believed the brand was “turning the corner”.

Shares closed 14.9% up.

Home improvement retailer Wickes said first-half profits surpassed its targets on the back of strong digital volumes, as the company announced its first dividend payment.

Shares in the business, which only floated on the stock market earlier this year after splitting from Travis Perkins, closed up 2.1% after the announcement that adjusted pre-tax profits increased to £46.5 million for the six months to June 26.

Builder Galliford Try said it has seen a return to profit and is coping well with the material shortages and price hikes amid supply chain problems.

The group posted better-than-expected pre-tax profits of £11.4 million for the year to June 30, against underlying losses of £59.7 million the previous year.

Shares closed 4.3% higher.

Online fashion giant Asos unveiled its plans to reduce emissions and will cut so-called scope one and two emissions per order by 87% by 2030, when compared with the financial year ending 2019.

It will also reduce the emissions from its own-brand products by 58% per pound of profit that the company makes by the end of the decade, and slash transport emissions by the same amount.

Shares dipped 0.5%.

The biggest risers on the FTSE 100 were Ashtead, up 308p to 6,162p, IAG, up 5.34p to 142.46p, Flutter Entertainment, up 555p to 15,025p, Rolls-Royce, up 3.56p to 109.06p, and Intermediate Capital Group, up 66p to 2,238p.

The biggest fallers on the FTSE 100 were Anglo American, down 135p to 2,818.5p, United Utilities, down 209p to 5,010p, Fresnillo, down 32p to 816.4p, BHP, down 68p to 1,968.2p, and Antofagasta, down 33p to 1,433.5p.

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