FTSE lifted by retail and travel optimism

Traders are focusing on the reopening of retail trade and the very gradual recovery in the travel sector

Charts (2)

Europe’s underlying economic picture remains fragile with the Eurozone’s GDP expected to show a decline of between 8% and 12% according to Christine Lagarde, but traders are fending this off as a worry for another day and are instead focusing on the reopening of retail trade and the very gradual recovery in the travel sector. UK banks seem to be about the main ben beneficiaries of the current market optimism on expectations that retail-facing businesses will gradually get back on their  feet.

Banks are attracting heavy volumes this morning, Lloyds about twice its usual flows with the whole sector trading between 3.5% and 5.6% higher. Among travel stocks cruise operator Carnival is topping the gainers list in anticipation of the no-sail order by the US Centre for Disease Control being lifted in July. 

British Land shares are holding up surprisingly well given that the company accumulated a net loss of £1.1 bn and wrote off a quarter of the value of its retail portfolio due to the pandemic. Like many other property owners British Land’s finances are being squeezed as commercial tenants whose businesses have been closed due to the lock down remain reluctant to pay their rents.

Asset manager St James's Place has gained close to 7% after it reported a small uptick in net inflows in April. The firm remains cautious about the outlook in the months ahead.

Brent crude has slipped 2%

After the recovery over the last week Brent crude is trading 2% lower this morning, mostly testing the edges of the current trading range between $35.4-$36.6. Over the coming days traders will try to second guess OPEC’s next decision in early June but for the moment no further output cuts seem to be on the table as both Russia and OPEC are gradually fulfilling their reduction pledges.

More from Indices

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account