London stocks gained Wednesday, as investors waded back in to pick up perceived bargains, with travel names like Stagecoach surging on deal news.
The FTSE 100 index
climbed 1.6% to 7,060 though it was held back by losses for the commodity sector as oil prices
reversed a surge that has taken it to 2008 highs. Shares of BP
were down more than 2% and Shell
was off 1%.
London was underperforming European equity indexes, where the DAX
was headed for its best session in two years.
Mining stocks were also declining overall, with Rio Tinto
down over 3%, while Glencore
and Anglo American
lost more than 1% each.
The London Metals Exchange said nickel trading won’t resume before Friday, following a volatile session on Tuesday that saw prices soar, due to short positions out of China that needed to be closed after the industrial metal climbed as much as 70% on Monday.
Shares of International Consolidated Airlines
climbed nearly 9%, while InterContinental Hotels
rose 6%, and Wizz Air
and easyJet shares
were up by 12% or more.
Airlines have been under pressure over worries about soaring fuel costs and weak traveler confidence, as the Russia-Ukraine war stretches into nearly two weeks.
Other gainers such as Rolls Royce
which is dependent on commercial air travel, and Premier Inn owner Whitbread
rose “amid some speculation that even if international travel takes a knock, domestic bookings could rebound again if holidaymakers opt to stay closer to home,” said Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown, in a note to clients.
Elsewhere, shares of Stagecoach
surged after it announced it received a rival £596 million ($782 million) cash bid from German asset manager DWS
and “looks set to pursue that relationship instead of driving off into the sunset with National Express,” said Streeter.
“The stage had been set for another bidder to jump in given the brakes had already been put on the merger with National Express, as the UK’s Competition and Markets authority had been investigating if the deal would have reduced competition in the industry,” said Streeter, noting that Stagecoach had been hit hard by travel restrictions during the pandemic.