FTSE 100 Continues to Rise
The FTSE 100 climbed over 100 points yesterday, and continued its rise today, as confidence in the economy grows, ahead of retailers preparing to reopen on June 15th.
As part of phase 2 of the government’s COVID recovery plan, all non-essential retailers - including specialist, clothing, home goods, and electronics stores - will be able to reopen, provided they’re able to implement social distancing measures and create “COVID secure” spaces.
Retail stocks have been hit hard since the beginning of lockdown on 23rd March but investors are filling their baskets with retail and leisure stocks amid optimism that the reopening of the retail and holiday markets will encourage shoppers to spend.
This comes after Prime Minister Boris Johnson announced on Monday that car showrooms and outdoor markets can reopen from 1st June, with other “non-essential” retailers following shortly after on 15th June.
Retail Stocks Rise
Amongst the biggest risers in retail were JD Sports (up 11% at 624p), Primark owner Associated British Foods - hurt most in the crash due to having no online shop - (up 7% to 1800p), and Next (up 6.7% at 4800p).
Travel Stocks Dominate the Market
The biggest riser was holiday company Tui whose stocks rose by a staggering 50% after the Spanish government announced that Spain would allow tourists to visit “in safe conditions” whilst British Airways owner IAG rose by 22.5%. Easyjet rose by more than 19% following reports that the German government had agreed a bailout plan with Lufthansa.
Neil Wilson, chief market analyst at Markets.com, said: “Strength in this sector underscores confidence among investors that economies are reopening, and consumers are keen to travel.” “There is a lot more hope that travel restrictions across Europe will be eased in time for the summer holidays. If the summer holiday season can be saved it would be a big plus after most of us wrote it off. “
Automotive Stocks Rev Up
Whilst the latest James Bond film is delayed, shares in the titular character’s favourite car firm Aston Martin saw a surge of a whopping 30% after it confirmed that it has parted with Chief Executive Andy Palmer who is to be replaced with Mercedes senior executive Tobias Moers in August.
Shares in car dealerships also joined the fast lane due to news that showrooms can reopen from 1st June which saw Vertu up by 13%, Pendragon rising 11% and Inchcape’s shares up 5%.
The recent hike in share prices is bound to give business owners confidence that once they reopen in whatever capacity they are able to, we will see the high street returning to some form of normality.
