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Travel stocks, Morrisons push FTSE 250 to record highs

Morrisons lifts London mid-caps as virus fears weigh
Morrisons lifts London mid-caps as virus fears weigh   -   Copyright  Thomson Reuters 2021
By Reuters

By Shashank Nayar

– British mid-caps jumped on Monday, led by gains in heavyweight mining stocks, supermarket chain Morrisons, and a surge in travel stocks ahead of England’s plans to ease its lockdown measures.

Morrisons jumped 11.3% and was the top boost to the mid-cap index as the $8.7 billion bid battle for the supermarket chain intensified on Monday when a third private equity group entered the fray.

The domestically-focused FTSE 250 index rose 1.2%, with base metal miners gaining nearly 1.5%. Travel stocks surged 2.3% on the prospect of a reopening.

“Supermarkets have done well since the beginning of the lockdown last year and with the restrictions about to be lifted, these stocks are well geared to gain … with an added benefit of a lot of them being a target of foreign flows,” said Michael Baker, an analyst at ETX Capital.

British Prime Minister Boris Johnson was due on Monday to set out plans to end COVID-19 restrictions, in a test of whether a rapid vaccine rollout offers enough protection from the highly contagious Delta variant.

The blue-chip FTSE 100 index rose 0.6%, led by gains in financial stocks.

“Looking at London markets today investors seem pretty sure the vaccine rollout has changed things from this time a year ago,” said Danni Hewson, a financial analyst at AJ Bell.

The FTSE 100 has gained nearly 11.0% so far this year on government stimulus support and record low interest rates but has largely underperformed its European and domestic mid-cap peers and continues to be one of the lowest valued markets.

The post-lockdown bounce-back for British services firms eased only slightly in June but price pressures increased by the most on record, adding to signs of a further rise in inflation ahead, a survey showed.

Among stocks, Spire Healthcare dropped 2.8% even after Australia’s Ramsay Health Care sweetened its buyout offer to about 1.04 billion pounds ($1.44 billion).

Graphic: British blue-chips turn cheaper than mid-caps – https://fingfx.thomsonreuters.com/gfx/mkt/dgkvlrjqgvb/FTSE%20100%20and%20FTSE%20250%20valuation.png