Key Points
- FTSE 100 closing price of 7,079.30, -0.2%
- Miners, homebuilders weigh on FTSE
- Travel & leisure stocks strong
- GBP soft on reopening fears, EU talks
- Bitcoin rebounds as El Salvador makes it legal tender
By Samuel Indyk
Investing.com – The FTSE 100 finished the session lower but off of worst levels as a fall in miners and homebuilders was largely offset by a rally in travel & leisure stocks.
Homebuilders had been strong earlier in the week amid signs of a raging hot housing market with house prices rising by the most since 2014 in May. However, they have pulled back slightly today amid touted profit taking.
At the other end of the scale, travel & leisure stocks were strong as investors appeared cautiously optimistic that some travel plans can go ahead this summer. The European Parliament approved the digital COVID certificate today, aimed to essentially enable travel between member states restriction free. However, despite approval from parliament, the member states will still be able to decide individually how to apply the rules.
Companies such as Restaurant Group (LON:RTN), IAG (LON:ICAG), Wizz Air (LON:WIZZ) and EasyJet (LON:EZJ) were near the top of the FTSE 350. However, SSP Group (LON:SSPG), the owner of brands such as Upper Crust, fell after posting a £300mln loss last year due to the pandemic.
GBP was soft although FX markets were again trading in tight ranges ahead of the key risk events tomorrow including US CPI and the ECB interest rate decision. Discussions between the UK and the EU on the Northern Ireland protocol remain fraught, and the European Union is reportedly considering advancing their legal challenge and potentially introducing tariffs over the UK’s action in Northern Ireland.
GBP/USD dropped back towards 1.4100 and EUR/GBP made a firm break above 0.8600 following the latest rhetoric from the UK and EU.
WTI and Brent crude futures were both trading higher after the latest US inventory data. The EIA said crude stockpiles fell by 5.241mln barrels in the latest week, more than the drawdown of 2.036mln barrels expected. The news helped WTI trade above $70 per barrel, along with reports that issues remain in Iranian nuclear talks. However, if sanctions are lifted, Iran expects most of the country’s crude oil production will be restored within a month.
In the cryptocurrency space, Bitcoin staged a rebound above $35,000 after dropping towards $32,000 yesterday. The main story was news that El Salvador’s parliament had approved the Bitcoin Law, making Bitcoin legal tender in the country. However, it wasn’t all positive. China started blocking cryptocurrency exchanges from social media platforms and there were also reports that the country had ordered all cryptocurrency miners in Qinghai province to shut down.
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