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FTSE 100 latest: Airlines in demand on improved travel outlook

·2-min read
British Airways is part of IAG  (Getty Images)
British Airways is part of IAG (Getty Images)

British Airways owner IAG surged 4% in the FTSE 100 index on the prospect of several countries including Turkey being removed from the government's red list, with compulsory PCR tests for fully vaccinated travellers also set to be scrapped.

IAG's shares rose 5p to 147.5p to continue the recovery started yesterday by Ryanair boss Michael O'Leary, whose bullish outlook includes plans for 5,000 new jobs over five years.

The sector has been awash with optimism plenty of times this year, only for investors to be disappointed.

IAG shares, for example, are still below where they started the year and those backing easyJet now face the prospect of seeing their stakes diluted unless they take up their rights in a £1.2 billion fundraising.

Bloomberg reported today that easyJet founder Stelios Haji-Ioannou and his family have already opted to sell their rights in a move leaving them with an overall 15% stake. Shares came under more pressure, falling 9.9p to 596.73p.

Elsewhere in travel, package holiday firm Jet2 cheered 4% or 51.45p to 1,212.45p and blue-chip hotels group InterContinental improved 82p to 4,642p. Its performance contributed to the FTSE 100 index climbing 25.48 points to 7,052.39.

Others on the front foot included Lloyds Banking Group as analysts at Deutsche Bank said the City had under-estimated how much a half-percentage point rise in interest rates will benefit net interest income over the next two years.

The bank lifted its price target by 3p to 60p, compared with the 45p seen today after a rise of just over 0.2p.

Mining stocks, meanwhile, continue to struggle due to falling iron ore prices, with Anglo American the biggest casualty after being downgraded by Morgan Stanley.

Shares fell 3% or 97p to 2,721.5p and Rio Tinto dropped 109.5p to 4900.5p.

The FTSE 250 index, which rose 144.68 points to 23,778.80, was led by Restaurant Group on hopes for a pick-up in airport business. Shares charged ahead 5% or 6p to 111.4p, just ahead of DIY chain Wickes in the wake of a better-than-expected trading update.

Shares rose another 12p to 249.2p after analysts at Peel Hunt increased their price target to 360p and said the chain was “severely undervalued”.

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