FTSE 100 on the rise thanks to travel and banking stocks
|Strong tech earnings have done little to lift sentiment, with the FTSE 350 upside largely driven by gains across banking and travel names.
-
European markets grind higher after US tech earnings.
-
Travel stocks benefit from loosening restrictions.
-
Barclays outperformance highlights favourable financial outlook.
European markets are making tentative gains in early trade today, with a wave of earnings from US tech giants Apple, Alphabet, AMD, and Microsoft doing little to steer sentiment despite some pretty impressive figures. Underperformance for the Nasdaq in yesterday's session highlighted fears that perhaps the bar had been set too high after the Pandemic drove profits and revenues higher. However, while all four tech giants outperformed across both revenues and earnings, the market reaction has been relatively muted for most. Fears over potential chip shortages and questions over performance in the months ahead hindered some of the upside, but ultimately this is often the case when companies have already seen so much growth built into the share price.
Travel stocks are leading the way higher for the FTSE today, with First Group, Wizz Air, easyJet, and IAG forming the leading pack within the sector. Plans for the UK to allow double-jabbed visitors from the EU and US without the need to quarantine marks a welcome albeit belated boost for the travel and tourism sector. With summer in full swing, the airlines will hope that this measure drives a swift and sharp rise in bookings as they aim to make up for an incredibly tough period. Meanwhile, the growing incentivisation of vaccines should also drive higher engagement from otherwise unwilling cohorts of the population, with young people more likely to get vaccinated if it means they can benefit from greater freedoms.
Banking stocks are enjoying a boost today, with Barclays seeing their profits almost triple over the first half of the year. Understandably the reliance upon their investment banking division does highlight why we are likely to continue seeing underperformance for the UK banks compared with their US counterparts. However, with the government mitigating much of the economic fallout of the pandemic, and spending likely to gradually increase, banking stocks remain a strong pro-cyclical pick going forward.
Ahead of the open we expect the Dow Jones to open 4 points lower, at 35,054.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.