London markets open flat as the travel industry rally loses steam

Wednesday, January 5, 2022 at 9:32

The capital’s leading FTSE 100 index rose 0.07 per cent to 7,510.12 points during the first hour of trading, while the mid-cap FTSE 250 index, which is more tailored to the health of the UK economy, lost 0.03 per cent. to a drop to 23,889.47 points

The London markets opened flat this morning when a rally among travel and airlines lost steam.

The capital’s leading FTSE 100 index rose 0.07 per cent to 7,510.12 points during the first hour of trading, while the mid-cap FTSE 250 index, which is more tailored to the health of the UK economy, lost 0.03 per cent. to a drop to 23,889.47 points.

The city’s flagship indices were weighed down by airlines, hotel corporations and aerospace engineers, some slashing some of yesterday’s progress.

British Airways owner IAG, which yesterday topped the FTSE 100’s biggest riser, fell 2.03 percent, while aircraft engine maker Rolls Royce fell 1.23 percent.

The short-haul airlines easyJet and Wizz Air, which yesterday were at the top of the best results on the FTSE 250, sank again this morning.

The former fell 0.03 per cent, while the latter dived 0.74 per cent.

Investors tumbled into travel stocks during the first session of 2022 as the likelihood of tougher measures to curb the spread of Omicron in the UK diminished after the UK government yesterday confirmed it was sticking to Plan B measures.

A more subdued morning session in London, according to analysts, was also driven by a growing investor concern over the intensified inflationary pressures in the UK.

Russ Mold, chief investment officer at AJ Bell, said: “If the UK markets started their first trading day in 2022 by climbing the wall of concern over Omicron, they stumbled a bit on day two as inflation concerns and interest rate speculation returned to front.”

Supermarkets offset the travel sector’s losses, with middle-class favorite Ocado topping the largest riser by climbing 4.72 percent. Fellow supermarket Sainsbury’s added 1.23 per cent.

The pound snuck up on the dollar and strengthened 0.03 percent to buy $ 1.3536.

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