Travel stocks drive rally after restrictions lifted for vaccinated UK arrivals

London’s biggest markets made gains as travel firms were pushed higher by the decision to scrap the need for US and EU travellers who are fully vaccinated to quarantine on arrival.

A slew of positive earnings announcements had already put traders in good spirits before the announcement helped spark a number of recently pressurised companies into the green.

The FTSE 100 closed 20.55 points, or 0.29%, higher at 7,016.63 on Wednesday.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “A big sigh of relief has rippled through the travel and aviation sector with the confirmation from the UK Transport Secretary that double jabbed arrivals from the US and the European Union will no longer have to isolate.

“Speculation that a decision was imminent had pushed up shares in British Airways owner IAG which is heavily reliant on transatlantic bookings.

“Rolls-Royce was also among the FTSE 100 risers, given that the group’s bread and butter comes from servicing and delivering wide body aircraft engines, which are used primarily for long-haul flights.”

In the FTSE 250, Ryanair, easyJet, Wizz Air and travel caterer SSP all rode the wave of positivity to close significantly higher.

Elsewhere in Europe, the other major markets also made headway, recovering after a cautious start to the trading week.

The German Dax increased by 0.33% and the French Cac moved 1.18% higher.

Across the Atlantic, the US markets were also buoyed by earnings results as they nudged higher ahead of the latest Fed meeting.

Meanwhile, sterling climbed as declining Covid case numbers helped it to continue its rebound against the weak US dollar.

The pound was up 0.1% versus the US dollar at 1.388 and was 0.02% higher against the euro at 1.175.

In company news, Barclays rose in value after the banking firm made profits well in excess of what was expected in the first six months of the year as it released money it had set aside when Covid-19 first hit.

The bank said pre-tax profits soared to £5 billion and, as a result, announced a 2p per share dividend for shareholders, above the expected 1.8p payment.

Shares closed 3.38p higher at 172.76p on Wednesday.

ITV tumbled into the red at the close despite initially opening higher after it said the worst of the pandemic was over.

However, it swung lower in value as the lack of an interim dividend cut into investor sentiment.

It finished the session 1.6p lower at 117.75p.

Recruitment firm Staffline bounced higher as it predicted a rise in gross profits for the past half-year, with revenue expected to lift 4.7% to £450.7 million against the same period last year.

Shares in the company were 6.4p higher at 64.6p.

The price of oil pushed to its highest level in almost two weeks as it was buoyed by a decline in crude oil inventories.

Brent crude increased by 0.39% to 74.77 dollars per barrel.

The biggest risers on the FTSE 100 were Fresnillo, up 52.4p at 806.4p, St James’s Place, up 84.5p at 1,592.5p, IAG, up 6.6p at 181.92p, and Rolls-Royce, up 3.43p at 101.7p.

The biggest fallers of the day were Reckitt, down 181p at 5,519p, HSBC, down 6.7p at 396.6p, ITV, down 1.6p at 117.75p, and BAT, down 36.5p at 2,734p.