MARKET REPORT: Travel stocks surge as Government eases Covid rules

Airlines, hotels and other holiday stocks received a boost after the Government relaxed rules on international travel ahead of the half-term break.

Transport Secretary Grant Shapps said that from October 4 travellers who have had two doses of the vaccine will no longer need to take a pre-departure Covid-19 test before arriving in England from a country that is not on the Government’s ‘red list’.

He added that later that month travellers will be able to replace a PCR test with a cheaper lateral flow test.

Cleared for take-off: From October 4 travellers who have had two doses of the vaccine won’t need to take a pre-departure Covid test before arriving in England from red list countries

The traffic light system is also being scrapped, with the green, amber and red lists being replaced with a single red list, effectively creating ‘go’ and ‘no-go’ countries for travellers. 

Additionally, eight countries currently on the red list, including tourist hotspots Turkey and the Maldives, will be removed next Wednesday.

Shares in British Airways-owner IAG climbed 4.9 per cent, or 7.04p, to 149.5p to the top of the FTSE 100 leaderboard amid hopes of a surge in demand. 

Stockwatch – Safestay

Hostel chain Safestay got a bump after it revealed a possible takeover approach.

The business, which owns around 20 hostels across ten countries in Europe, said it had received a ‘highly conditional approach’ from an unnamed potential buyer.

Safestay added that it is commencing a review of the business as it attempts to repair the damage caused by the Covid-19 pandemic.

It caused revenues and guest numbers to plunge in 2020. Even when its facilities were open, occupancy rates only reached 38 per cent. The company’s shares jumped 10 per cent, or 2p, to 22p.

Budget carrier Ryanair rose 1.7 per cent, or €0.29, to €16.92 while shares in rival Easyjet gained 3.9 per cent, or 23.8p, to 630.4p and Wizz Air bounced 2.6 per cent, or 128p, to 5056p.

Other firms in the sector rode the wave of optimism, with package holiday group Tui jumping 6per cent, or 17.1p, to 302.7p while On The Beach Group surged 8.5 per cent, or 27.5p, to 350p.

Holiday Inn and Crowne Plaza-owner IHG was also a winner, rising 2pc, or 90p, to 4650p. Rolls Royce, meanwhile, which makes engines for passenger aircraft, edged up 1.8 per cent, or 1.94p, to 111p.

Newsagent WH Smith, which has multiple locations in airports and train stations, also jumped 1.7pc, or 27p, to 1651p while SSP, the owner of outlets such as Upper Crust and Ritazza often found in airports and train stations, added 4.5 per cent, or 11.4p, to 266.4p.

Things were looking less rosy for the wider market, with the FTSE 100 dropping 0.9pc, or 63.84 points, to a six-week low of 6963.64. 

The mid-cap FTSE 250, meanwhile, dipped early on but managed to recover to close up 0.1 per cent, or 26.1 points, to 23658.94.

The sell-off may have been sparked by surging bond yields, with UK five-year gilts hitting their highest levels since March 2020. 

Blue-chip miners were also weighing on the FTSE 100 as iron ore prices continued to collapse. Anglo American was the biggest faller in the FTSE 100, dropping 8.1 per cent, or 227.5p, to 2591p, while BHP Group fell 4.8 per cent, or 94.4p, to 1873.8p, and Rio Tinto sank 3.6 per cent, or 180.5p, to 4829.5p.

Prices of iron ore, a key ingredient in steel-making, plunged to an 11-month low on Thursday amid fears of lower steel output from China. 

Matters were not helped by analysts at UBS, who downgraded their rating on Anglo American, while cutting target prices for both BHP and Rio Tinto.

Elsewhere, investors in Virgin Wines toasted a new partnership with online greeting card group Moonpig, sending the shares up 2.7 per cent, or 5.5p, to 210p.

Under the deal, Virgin will launch a new range of 32 wines, some of which will be exclusively available on Moonpig’s website as part of the latter’s gift offering.

Moonpig shares inches up 0.8 per cent, or 3p, to 380p.

Accsys Technologies, a maker of wood-based building materials, was flat at 155p despite flagging ‘strong sales and revenue growth’ in the five months to the end of August, helped by rising demand and higher prices.

Solar power investor Nextenergy was a bright spot, ascending 1.5 per cent, or 1.5p, to 100p after unveiling a joint venture with Eelpower, a leading UK battery specialist, to develop power storage projects.

Blue-chip banks were boosted by upgrades from Barclays, with HSBC rising 1.9 per cent, or 7.15p, at 376.05p and Standard Chartered adding 0.2 per cent, or 0.7p, to 442p.