The FTSE 100 surged on Wednesday as travel shares led the market higher on hopes the industry could bounce back to near normal levels this summer.
Travel shares crashed on the announcement of the Omicron variant, but as cases fall and the variant proves to be less severe than first thought, the risk premium in travel shares is being removed in sharp moves to the upside.
IAG was the FTSE 100 top riser up 7%. Hot on the airline’s heels was Intercontinental Hotels rising 4.5%.
FTSE 100 rally
Although travel shares led the FTSE 100, the rally was broad with most industry sectors rising on the day.
The FTSE 100 has avoided the volatility evident in US markets this week and has highlighted the differences in the composition of the indices.
“For years this under-representation for tech held the FTSE 100 back, now the dominance of relatively cheap tobacco, resources and banking stocks is playing in its favour. For the year to date it is up slightly while the Nasdaq in the US is down double digits,” said AJ Bell investment director Russ Mould.
“How long this trend continues remains to be seen.”
The FTSE 100 is up 1.5% so far in 2022 compared to declines of 8.4% and 13.5% for the S&P 500 and NASDAQ respectively.
Fresnillo
Fresnillo was firmly at the bottom of the FTSE 100 having crash 12% after the silver-focused precious metals miner said they missed silver production.
The company did exceed gold production guidance but this did little to stop investors fleeing the stock. Fresnillio recorded silver production of 53.1 moz in the full year and 751.2 koz of gold.
“Given the challenges presented by both the continued effect of the pandemic and more recent Government labour reform initiatives, as well as certain operational issues, we have delivered a creditable performance during the year, with silver production marginally short of guidance, but gold production exceeding expectations,” said Octavio Alvídrez, Chief Executive Officer at the miner.