A glimmer of hope on the FTSE from an unexpected quarter: tourism and travel. InterContinental Hotels Group updated the markets about its operations and although much of the update was what investors would have expected under the current circumstances, like a 60% drop in per-room revenue in March, what captured attention is that hotel room demand in China is beginning to improve for the first time since the virus started spreading in January.
The stock, which is one of the FTSE’s most even-keeled ones with very few spikes and troughs during the course of a year, has bounced 13% this morning. It has some way to go to make up a 53% drop in January but with China beginning to recover from the pandemic investors looking for very oversold stocks are now starting to consider travel shares. Tour specialist TUI is beginning to turn the corner for the same reasons.
Banks mixed after stress test cancelled
The Bank of England is continuing with a series of moves to support businesses and banks through this crisis. After last night’s decision to cut rates even further to a bare minimum of 0.1% and a promise of a £200 billion bond programme, the BoE also decided that banks will not have to meet a stress test this year given the pressure they are likely to come under as businesses struggle to survive. Banks stocks showed only a mild reaction with Lloyds and Barclays nudging higher, HSBC flat and RBS trading lower.
Brent crude has bounced back above $30 overnight in reaction to the US deciding to buy more oil for its emergency stockpile. President Trump has also said that he would intervene in the dispute between Saudi Arabia and Russia over the overproduction of oil at the right time, lending oil some more support.