UK Markets Fly Higher as Airline Stocks Generate Lift from Falling Oil Prices
Banks and airline stocks have led the FTSE 100 higher, while troubled supermarket chain Tesco strengthened after the appointment of two new directors.
Last week, the London benchmark index declined to its lowest closing level in almost a year, but continued its recovery to trade 0.51% higher for the session at 6,561.43 points as of 1:20pm BST.
As the recent civil unrest in Hong Kong seemingly eased, HSBC and Standard Chartered, both of which have a large exposure in the country, saw their shares rise, with analysts at Barclays also forecasting a strong period ahead for the two banks.
Declining oil prices
have also boosted the aviation industry, with International Consolidated Airlines Group
(IAG), which owns and operates both British Airways and Iberia, and easyJet advancing strongly.
Fuel is the single most significant cost burden for carriers.
Broker upgrades from Citigroup and Credit Suisse also helped to boost easyJet, while IAG Chief Executive Willie Walsh is reported to have told a Spanish newspaper that the company is preparing to announce its first post-merger dividend next month.
Although still reeling from the accounting scandal that has dragged its shares lower, Tesco
recouped 2.1% as investors welcomed the appointment of two new non-executive directors to its board.
Compass Chief Executive Richard Cousins and Mikael Ohlsson, former boss of Ikea, are set to join next month, in what has been described as 'a light beam of good news from Tesco in a sea of darkness' by analysts at Shore Capital.
The positive sentiment was extended across the sector, with J Sainsbury
and WM Morrison gaining 1.3% and 1.6% respectively.
Stocks with defensive properties topped the list of losers as United Utilities
slumped by 0.7% and Severn Trent shed 0.5%.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
By Jonathan Sudaria, 6 October 2014