Britain’s key stock market index outperformed its European peers on Tuesday, driven higher by travel and commodities stocks as optimism was also fueled by upbeat manufacturing data. The FTSE 100 UKX, + 0.06%, the index of London’s top stocks by market capitalization, was flat, ahead of most other major European indices, which were more in the red. The relative outperformance of the FTSE 100 on Tuesday came after UK markets closed for trading on Monday due to a holiday.
While the broader narrative remains one of economic optimism driven by the waning severity of the COVID-19 pandemic, with investors continuing to view inflation as a risk to markets, airline stocks received a boost from plans to reopen Europe to broader travel. On Monday, the European Union executive branch recommended easing travel restrictions to allow tourists from more countries to enter the 27-member bloc. Read more: The EU proposes to reopen the external borders as the vaccination campaign accelerates According to the proposal of the European Commission, people who have been fully vaccinated against COVID-19 with an EU-approved vaccine or who come from a country with “a good epidemiological situation” is welcome to the region. The EU has approved vaccines from Pfizer PFE, + 3.05%, Moderna MRNA, + 4.03%, AstraZeneca AZN, + 1.19% and Johnson & Johnson JNJ, + 1.52%. “News that the European Commission is taking steps to reopen the continent in time for the summer travel season is increasing the appetite for risk,” said Sophie Griffiths, an analyst at Oanda. “In addition, Britain’s expected announcement of a green list for countries people can travel to is adding further support for travel and tourism actions.” UK Trade Minister Liz Truss told Sky News on Tuesday that a “green list” of countries to which the British could travel without having to isolate themselves upon return will be published shortly. Shares of airlines IAG IAG, + 1.92%, owned by British Airways, and easyJet EZJ, took off + 1.98% in London operations, with IHG from InterContinental Hotels Group, + 1.28% shares also went up. “Adding to the upbeat mood, the data revealed that UK manufacturing activity hit a 27-year high in April,” added Griffiths. The IHS Manufacturing Purchasing Managers Index rose for the 11th consecutive month in April to 60.9, the highest reading since 1994. Other stocks that contributed to the relative strength of the FTSE 100 were companies exposed to commodity prices. “The catalyst for this latest bullish move is talk of a commodity supercycle, with oil and mining companies on the rise, as well as continued optimism about the reopening of the global economy,” said Russ Mold, analyst at AJ Bell. Plus: Is there a new commodity supercycle? Perhaps not, these analysts say. Metals and mining stocks Rio Tinto RIO, + 1.58%, BHP BHP, + 1.26%, Anglo American AAL, + 1.29%, Antofagasta ANTO, + 0.19%, Glencore GLEN, + 1.76%, Polymetal International POLY, + 3.64%, and Fresnillo FRES, + 4.57%, all rose, as did the shares of major oil companies BP BP, + 2.81% and Royal Dutch Shell RDSA, + 2.12%. Tech stocks added weakness to London’s key index, with stocks in industrial software group Aveva AVV, -3.33%, online grocery and robotics logistics group Ocado OCDO, -3.48%, and delivery player of Just Eat Takeaway JET foods, -1.45% all sinking.