The FTSE 100 continued its rally into a second day on Wednesday, driven by a recovery in travel shares.
The FTSE 100 rose 1.32% to 6,147 in early trade on Wednesday and approached the highest intraday levels seen since the March sell off.
The FTSE 100 top riser was Carnival, up over 5% as it built on a 12% rally yesterday. easyJet and International Consolidated Airlines were both stronger, with the later posting gains in excess of 5%.
Optimism over the reopening of European economies to holiday makers has driven investors back into beaten down travel shares that now look like they are set to reignite cash flows within the next month and avert a much feared collapse.
In addition to strength in the travel sector, potential plans for more EU stimulus raised the mood across the market as Chinese industrial data showed signs of improvement.
European shares staged a significant rally despite further concerns around US/China relations. China unveiled further measures that have been seen to increase instability in Hong Kong and threatens a reaction from the west.
“With varying degrees of tenacity, the markets continued to rally on Wednesday, ignoring further potential red flags for the US-China relationship,” said Connor Campbell, analyst at Spreadex.
“As Beijing add a bill banning mockery of the Chinese national anthem, while preparing to rubber stamp a new set of national security laws, armed policed flooded the streets of Hong Kong in an attempt deter and disperse pro-democracy protests.”
“Beyond the terrifying implications for Hong Kong itself, it is also adding fuel to the fire of US-China tensions. Trump has said he is ‘displeased’ with China, and that he will take action against the superpower this week if the national security laws are imposed.”
“And yet, despite all this, investors were insistent on focusing on the lockdown-easing measures from around the globe, extending yesterday’s substantial gains,” said Campbell.