| 12.8°C Dublin

FTSE looks up as Covid-19 optimism and oil drop boosts travel firms

Experts warned that the bounce might be short-lived.

Close

The FTSE 100 closed the day up 166.89 points, or 3.1%, to 5582.39 (PA)

The FTSE 100 closed the day up 166.89 points, or 3.1%, to 5582.39 (PA)

The FTSE 100 closed the day up 166.89 points, or 3.1%, to 5582.39 (PA)

Global markets opened the week in positive territory as investors cheered signs that the number of coronavirus cases may be stabilising.

The FTSE 100 closed the day up 166.89 points, or 3.1%, to 5582.39.

But it left the index behind its cousins on the continent. Germany’s main index, the Dax, rose 5.8%, while the Cac 40 in Paris was up by 4.6%.

Investors had been optimistic that the spread of the coronavirus has started to slow. However experts warned that this could be somewhat premature.

“The rally in equities will likely be short-lived as investors will soon have to become sceptical of the great recovery and focus on the financial stress that will happen after several key parts of the economy will not come back to life for many months,” said Edward Moya, an analyst at Oanda.

The FTSE 100 was pulled up by some good news from Rolls-Royce, which became the index’s best performer with an 18% rise.

The rally in equities will likely be short-lived as investors will soon have to become sceptical of the great recoveryEdward Moya, Oanda

Several travel companies, including easyJet and cruise operator Carnival, were also among London’s best performers, as oil gave back some of its gains from last week.

The price of a barrel of Brent crude oil dropped 3.5% to 32.95 dollars on Monday, as a meeting of Opec was delayed.

Prices have plummeted in recent weeks amid a battle between Saudi Arabia and Russia over production cuts.

However a potential thaw in relations last week had put a bounce back in Brent, which was trading at around 25 dollars at one point.

As the price of oil fell again on Monday, it had a knock-on effect on the companies that produce the black gold.

BP, which dropped by 1.45p, and Shell, which rose slightly, by 7.8p, were both among the bottom 20 performers on the FTSE 100.

In company news, engine-maker Rolls-Royce ended the day the FTSE 100’s best performer, up by 46.1p to 297.7p after it withdrew financial guidance and scrapped its final dividend.

Rolls-Royce said it had faced a £300 million headwind from the outbreak of coronavirus, which has grounded airlines’ fleets around the world. It is still around 50% down in the last month.

WHSmith closed the day up 94p to 1,094p after securing a new £120 million loan and will raise more cash to help it get through the coronavirus crisis.

The high street retailer said it has seen a “substantial downturn in economic activity” as a result of the virus.

EasyJet rose 77.4p to 552.4p even after founder Sir Stelios Haji-Ioannou warned the airline will “run out of money by around August”.

Sir Stelios renewed calls to cancel a £4.5 billion order with Airbus and called on finance chief Andrew Findlay to be removed.

Sterling rose 0.4% against the dollar to 1.2308. Against the euro it gained 0.6% to 1.1392.

The biggest risers on the FTSE 100 were Rolls-Royce Holdings, up 46.1p to 297.7p, Melrose Industries, up 13.46p to 88.72p, Legan & General, up 26.6p to 186.3p, Carnival, up 101.2p to 716p, and Barratt Development, up 63.1p to 447.4p.

The biggest fallers on the FTSE 100 were Sainsbury, down 7.3p to 206.1p, United Utilities, down 23.6p to 826.2p, Halma, down 41p to 1,848.5p, and Spirax-Sarco, down 150p to 7,710p and London Stock Exchange Group down 136p at 7,064p

PA Media