A big week for markets started on the front foot on Monday, with the FTSE 100 index trading at a pandemic high despite the latest setback for beleaguered travel stocks.
British Airways owner IAG and low-cost carrier easyJet were both 2% lower as their hopes for a summer trading revival were dealt another big blow by the UK Government’s likely decision to push back the full lifting of Covid-19 restrictions by a month.
Rolls-Royce also fell 3% but traders were otherwise relaxed about having to wait for freedom day as the FTSE 100 index climbed another 29.15 points to 7,163.21 and the more domestic-focused FTSE 250 index lifted 83.88 points to 22,818.01.
BT Group was one of the biggest top flight risers after investor interest was revived by a weekend of speculation over telecoms tycoon Patrick Drahi’s building of a 12% stake.
The shares were back at an 18-month high, rising 4p to 195.8p after profit taking on Friday.
Brent crude’s rise in price to more than $73 a barrel added to London’s momentum as Royal Dutch Shell improved 27p to 1,386p and BP added 4.4p to 328.7p. The recent revival of Tullow Oil also continued in the FTSE 250 index, up 8% or 4.8p to 64.42p.
The London market’s upbeat mood faces a sterner test later in the week, with UK inflation, unemployment and retail sales figures and the US Federal Reserve meeting on Wednesday.
US core inflation stands at 30-year highs, but commentators expect policymakers to stick by the narrative that inflationary pressures are transitory.
Oanda senior analyst Jeffrey Halley warned any mention or hint of tapering could result in carnage in multiple asset classes. He said: “I expect them to suck it up and shut up, even if some members are wavering behind closed doors.”
In corporate updates, semiconductor design firm Alphawave IP gave its newly listed shares a much-needed boost by revealing its strongest-ever first half performance.
The Cambridge-based company, whose chip technology enables data to travel faster and more reliably using lower power, has been boosted by design wins from 5G wireless customers in North America.
Shares were 7p higher at 322p, still short of the 410p opening price in its £3.1 billion flotation in mid-May.