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Stocks - Europe Higher; Travel Sector Soars As Reopenings Gather Speed

Stock MarketsMay 26, 2020 03:49AM ET
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© Reuters.

By Peter Nurse 

Investing.com - European stock markets rose Tuesday, helped by the sight of more and more economies reopening for business and by growing signs that the worst of the downturn may be over.

At 3:55 AM ET (0755 GMT), the DAX in Germany traded 0.7% higher, France's CAC 40 rose 1.3%, while the U.K.'s FTSE index was up 1.7%, outperforming after returning from Monday’s holiday.

The pace of economic revival has picked up markedly in the last week, with Spain's announcement of the reopening of its tourist sector having a particularly big impact. Reports also suggest that the German government wants to end a travel warning for tourist trips to 31 European countries from June 15, ending a further constraint on a major part of consumer spending in the region.

Japan too has ended states of emergency in its last five prefectures, including Tokyo. And in Europe 

“A full reopening of Japan, and vaccine hopes from the United States, has shunted Hong Kong worries to the back of the equity market’s minds,” Jeffrey Halley, senior market analyst at Oanda Asia Pacific., wrote in a note, reported by Bloomberg. “The peak-virus trade continues to maintain its strong positive momentum.”

In corporate news, Lufthansa (DE:LHAG) stock rose over 6%, continuing Monday’s gains after the German government agreed a 9 billion euro ($9.8 billion) bailout, which gives Berlin a veto in the event of a hostile bid for the airline. The agreement, which cements Lufthansa's near-complete monopoly on domestic flights within Europe's largest economy, still faces hurdles in gaining EU antitrust approval.

With other bailouts now seen as more likely and with the economic headwinds apparently fading, travel sector stocks are soaring again. IAG (LON:ICAG), the owner of British Airways, gained over 15%, easyJet (LON:EZJ) over 10%, Ryanair (LON:RYA) over 9% and Air France KLM  (PA:AIRF) more than 8%. Additionally, Travel group Tui (DE:TUIGn) surged 18% after its CEO said the company will resume flights at the end of June.

Turning to the autos sector, Aston Martin (LON:AML) soared 32% after the UK luxury carmaker confirmed that Tobias Moers, CEO of Mercedes-AMG, would become its chief executive officer.

Also, French carmakers Renault (PA:RENA) and Peugeot (OTC:PUGOY) jumped 5% and 3% respectively as President Emmanuel Macron said support for the hard-hit car sector will be "massively amplified".

The crude oil market has pushed higher, helped by the news that Japan, the third largest economy in the world, was reopening as well as the resumption of domestic flights in India.

At 3:55 AM ET, U.S. crude June futures traded 3.5% higher at $34.42 a barrel. The international benchmark Brent contract rose 2.2% to $36.30.

Elsewhere, gold futures fell 0.4% to $1,729.25/oz, while EUR/USD traded at 1.0935, up 0.3%.

Stocks - Europe Higher; Travel Sector Soars As Reopenings Gather Speed
 

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Comments (4)
jack hong
jack hong May 26, 2020 5:37AM ET
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spain open for tourists? lol, who are interested in going there?  not me. wait till the numbers come out at end of june, see how many brave overseas tourists bothered to venture there.
Chris Sundo
Chris Sundo May 26, 2020 5:27AM ET
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.. and many states skewed the numbers and covered up their misdeads ohhh, sounds like China 101
Chris Sundo
Chris Sundo May 26, 2020 5:26AM ET
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'signs that the worst of the downturn may be over..'  -- LOL -- At the beginning the bad was made out to be the worst, Now the bad likely gets worser. You open up the economy, have a few parties, ignore the rising cases, and yeah 'the worst is over'. But it's till all skewed as he ll.
Gavin Peterson
Gavin Peterson May 26, 2020 5:18AM ET
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Oil to the moon
 
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