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FTSE 100 movers: Travel & Leisure stocks find a bid, but Meggitt still unloved
19th Mar 2020 17:29
(Sharecast News) - Travel-related issues paced gains on the top-flight index as central banks on both sides of the Atlantic, including the Bank of England, US Federal Reserve, and European Central Bank carried out simultaneous emergency actions to help smooth over the dislocations in financial markets.
And fiscal support was expected to ramp up on either side of the Pond.
"The sellers have had it all their way for a few days now, but for once buyers of risk assets are stepping up to the plate. Equities are up, oil is recovering somewhat and the Aussie dollar is advancing too," commented IG chief market analyst Chris Beauchamp.
However, if the likes of TUI and Carnival managed to clamber up the leaderboard, some stocks in the sector were left behind, including IAG and InterContinental Hotels Group.
Underscoring the sector's plight, business lobby group, The International Air Transport Association (IATA), said up to $200bn could be needed to save the industry globally.
Indeed, in the States, analysts at Cowen were arguing that airlines there should simply furlough all non-essential staff and stop flights until the Covid-19 pandemic blew over, as occurred after the 11 September attacks.
That, they argued, would allow them to conserve their cash.
Concerns around airline carriers and the aftermarket in civil aerospace therefore continued to weigh on Meggitt.
Despite that, analysts at Citi upgraded their recommendation for the aerospace engineer's shares to 'buy', saying that the current price was discounting zero long-term growth in air-traffic from 2020's "depressed" level.
"Aftermarket stocks likely to be first hit, but first out [...] There is still a very high level of uncertainty near term, and consensus and company guidance both need to come down. However, we believe there is material upside in the shares as traffic starts to bottom," Citi said.
Also lending its weight to the upside was stock in Shell as Brent crude oil futures extended their recent rally, adding 11.36% to $28.07 a barrel.
In part, oil was helped by news that the US Department of Energy would purchase 30m barrels of oil for the country's strategic reserve by 26 March.
The US President also weighed in, saying that "at the appropriate time I'll get involved" in reference to the price war between Riyadh and Moscow.
Donald Trump said he was searching for the "medium ground".
"It's very devastating to Russia, because the whole economy is based on that, and they have the lowest prices in decades," Trump said. "I would say it's very bad for Saudi Arabia. But they're in a fight, they're in a fight on price, they're in a fight on output. At the appropriate time I'll get involved."
Market Movers
FTSE 100 (UKX) 5,151.61 1.40%
FTSE 100 - Risers
M&G (MNG) 124.50p 34.44%
Carnival (CCL) 737.20p 18.90%
TUI AG Reg Shs (DI) (TUI) 338.10p 18.80%
Auto Trader Group (AUTO) 432.30p 15.85%
Ashtead Group (AHT) 1,450.00p 11.54%
Flutter Entertainment (FLTR) 6,136.00p 11.32%
Centrica (CNA) 43.39p 10.97%
Diageo (DGE) 2,400.50p 9.11%
JD Sports Fashion (JD.) 319.40p 8.94%
ITV (ITV) 64.02p 8.66%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 195.00p -9.05%
Glencore (GLEN) 117.00p -9.00%
Evraz (EVR) 209.80p -8.98%
InterContinental Hotels Group (IHG) 2,385.50p -8.44%
SEGRO (SGRO) 659.40p -7.80%
Barratt Developments (BDEV) 367.80p -7.58%
Aviva (AV.) 217.40p -7.01%
Melrose Industries (MRO) 107.25p -6.74%
United Utilities Group (UU.) 875.80p -6.43%
Meggitt (MGGT) 223.30p -6.38%
And fiscal support was expected to ramp up on either side of the Pond.
"The sellers have had it all their way for a few days now, but for once buyers of risk assets are stepping up to the plate. Equities are up, oil is recovering somewhat and the Aussie dollar is advancing too," commented IG chief market analyst Chris Beauchamp.
However, if the likes of TUI and Carnival managed to clamber up the leaderboard, some stocks in the sector were left behind, including IAG and InterContinental Hotels Group.
Underscoring the sector's plight, business lobby group, The International Air Transport Association (IATA), said up to $200bn could be needed to save the industry globally.
Indeed, in the States, analysts at Cowen were arguing that airlines there should simply furlough all non-essential staff and stop flights until the Covid-19 pandemic blew over, as occurred after the 11 September attacks.
That, they argued, would allow them to conserve their cash.
Concerns around airline carriers and the aftermarket in civil aerospace therefore continued to weigh on Meggitt.
Despite that, analysts at Citi upgraded their recommendation for the aerospace engineer's shares to 'buy', saying that the current price was discounting zero long-term growth in air-traffic from 2020's "depressed" level.
"Aftermarket stocks likely to be first hit, but first out [...] There is still a very high level of uncertainty near term, and consensus and company guidance both need to come down. However, we believe there is material upside in the shares as traffic starts to bottom," Citi said.
Also lending its weight to the upside was stock in Shell as Brent crude oil futures extended their recent rally, adding 11.36% to $28.07 a barrel.
In part, oil was helped by news that the US Department of Energy would purchase 30m barrels of oil for the country's strategic reserve by 26 March.
The US President also weighed in, saying that "at the appropriate time I'll get involved" in reference to the price war between Riyadh and Moscow.
Donald Trump said he was searching for the "medium ground".
"It's very devastating to Russia, because the whole economy is based on that, and they have the lowest prices in decades," Trump said. "I would say it's very bad for Saudi Arabia. But they're in a fight, they're in a fight on price, they're in a fight on output. At the appropriate time I'll get involved."
Market Movers
FTSE 100 (UKX) 5,151.61 1.40%
FTSE 100 - Risers
M&G (MNG) 124.50p 34.44%
Carnival (CCL) 737.20p 18.90%
TUI AG Reg Shs (DI) (TUI) 338.10p 18.80%
Auto Trader Group (AUTO) 432.30p 15.85%
Ashtead Group (AHT) 1,450.00p 11.54%
Flutter Entertainment (FLTR) 6,136.00p 11.32%
Centrica (CNA) 43.39p 10.97%
Diageo (DGE) 2,400.50p 9.11%
JD Sports Fashion (JD.) 319.40p 8.94%
ITV (ITV) 64.02p 8.66%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 195.00p -9.05%
Glencore (GLEN) 117.00p -9.00%
Evraz (EVR) 209.80p -8.98%
InterContinental Hotels Group (IHG) 2,385.50p -8.44%
SEGRO (SGRO) 659.40p -7.80%
Barratt Developments (BDEV) 367.80p -7.58%
Aviva (AV.) 217.40p -7.01%
Melrose Industries (MRO) 107.25p -6.74%
United Utilities Group (UU.) 875.80p -6.43%
Meggitt (MGGT) 223.30p -6.38%