European markets stagnate but remain fueled by optimism about a return to normal for travel and leisure


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Optimism about the end of social restrictions is driving travel and leisure stocks higher, adding momentum to European markets on Tuesday as indices across the continent either remained flat or fell. Multi-year high commodity prices have also strengthened markets. The pan-European Stoxx 600 SXXP, -1.45% fell 0.9%, while the London FTSE 100 UKX, -0.78% was just below the flat level. In Paris, the CAC 40 PX1, -0.66% was 0.2% lower, and the DAX DAX in Frankfurt, -1.88% fell 1.3%.

Dow YM00 futures, -0.30% were heading lower around 20 points, set for a weak open after the Dow Jones Industrial Average DJIA, + 0.09% achieved a slightly higher close on Monday to close at 31.521. British stocks led European trading as the market absorbed Monday’s news from British Prime Minister Boris Johnson of the plan to gradually reopen the country. The UK is among the world leaders in COVID-19 vaccination, and the Johnson government has set a tentative date of June 21 for all social restrictions to be lifted. National holidays could be possible in mid-April. Also read: Boris Johnson describes the roadmap to get England out of the lockdown “The FTSE 100 [is] leading the way driven by outperformance in travel and leisure stocks as well as in the commodities sector, with commodity prices at eight-year highs, “said Michael Hewson, analyst at CMC Markets. All major European markets opened higher, but have since given up on gains, with most indices falling. “Travel and leisure stocks are getting a boost this morning after yesterday’s announcement of a reopening schedule in the UK prompted a surge in holiday bookings,” Hewson said. Shares of IAG IAG, owner of British Airways, + 2.05% and Air France – KLM AF, + 4.24%, rose almost 7%, while Lufthansa LHA, + 1.53%, increased more than 5 , 5% shares. In the aircraft manufacturing sector, Airbus AIR, shares of + 2.60% were up 4% and shares of troubled British engineer Rolls-Royce RR, + 5.83% were up about 9%. Optimism was also present in hotel stocks, with shares in InterContinental Hotels Group IHG, -0.98%, Whitbread WTB hotel and restaurant group, + 1.56%, and French hospitality giant Accor AC, + 2.44% all going up. Also: Bitcoin falls further below the key $ 50,000 level after Yellen calls it ‘extremely inefficient’. Major European oil companies also rose as crude prices remain at 13-month highs. The benchmark Brent BRN00, + 0.89% was about 1.5% higher, trading at more than $ 66.15 per barrel. Shares of BP BP, + 1.86%, Royal Dutch Shell RDSA, -0.13%, Total TOT, + 0.97% and Eni ENI, -0.01%, all rose. Strong commodity prices boosted shares in mining giants Rio Tinto RIO, -1.52%, Anglo American AAL, -1.71% and BHP Group BHP, -0.70%, which rose more than 1%. HSBC HSBA, -2.50% was a major drop in European trading, with the global banking giant falling as much as 2% after posting a 34% drop in earnings through 2020. Scottish Mortgage Investment Trust SMT shares, -8.05 % fell more than 5%. The publicly traded trust has significant stakes in big tech stocks like Alibaba 9988, -1.20% and Tesla TSLA, -8.55%, which have seen recent declines in share prices.