Travel stocks shrugged off the warnings to British holidaymakers in Tunisia thanks to renewed optimism over a bailout deal for Greece, a much larger market for the London-listed tour operators.
The Thomson and First Choice operator Tui, up 38p at 1,077p, and Thomas Cook, up 1.1p at 127.7p, rose on hopes that “Grexit” might yet be avoided, with new proposals being assessed by creditors.
News that the Foreign Office has urged Britons in Tunisia to head home, amid warnings that another terror attack is “highly likely”, failed to put off investors.
Tunisia makes up around 3 per cent of Tui and Thomas Cook’s business, while Greece makes up around 10 per cent of revenues – or 15 per cent over the summer months.
Panmure Gordon analyst Gert Zonneveld recently said that “Grexit” may even pay off for the companies in the long term: “If Greece ends up leaving the euro and reinstates the drachma, it might actually increase demand for trips there.”
Ryanair, around 5 per cent of whose revenues come from Greece, rose 27 cents to €12.41. The budget airline’s shares were also lifted as it accepted IAG’s £940m takeover of Aer Lingus, in which it has a near-30 per cent stake.
The news saw IAG rise 16.5p to 531p and Aer Lingus gain 4.25 cents to €2.47. Shares in EasyJet, which generates around 3.5 per cent of its revenues from Greece, climbed 40p to 1,673p, while mobile giant Vodafone, another company with a Greek business, was up 5.65p at 235.67.
The optimism over Greece helped the FTSE 100 rise 1.4 per cent to 6,673.38. A recovery among Chinese stocks, which have been hammered in recent weeks, also reassured investors on the state of the global economy.
The chip designer Arm Holdings, down 30p at 1,015p, was the Footsie’s biggest faller on fears China’s growth might be on the wane, which in turn could hit smartphone sales.
The Belfast-based IT consultants Kainos shot up on its debut, rising to 174p, well above the 139p float price. AIM-listed ReNeuron, up 0.88p at 5.75p, raised £68.4m at 5p a share to spend on its stem cell work. Investors include star fund manager Neil Woodford.Reuse content