MARKET WRAP: FTSE rallies, GBP falls, Oil jumps on OPEC+ plans By Investing.com

Key Points

• FTSE 100 closing price of 7126.42, +1.26%
• Oil rallies after OPEC reports
• GBP soft after Bailey comments
• Bitcoin weakens below $34,000

By Samuel Indyk

Investing.com – The FTSE 100 started the quarter on the front foot, supported by a rally in energy companies and travel stocks.

Oil giants BP (LON:BP) and Royal Dutch Shell (LON:RDSa) both traded near the top of the blue-chip index after oil rallied following early reports from the OPEC meeting. Brent and WTI both traded above $76 per barrel amid reports that OPEC+ group of producers were discussing a plan to raise output by 2 million barrels per day (bpd) by December, an average of around 400,000 bpd per month.

The plan would raise output by less than expected as most analysts were expecting an increase somewhere between 500,000 and 1 million bpd from August.

Travel & Leisure stocks also rallied, with airlines particularly strong amid hopes that the UK will come to an agreement on allowing fully vaccinated passengers to skip quarantine measures when returning form amber list countries in time for the school holidays. There are hopes that the UK and EU will reciprocate measures for those who have received both jabs.

British Airways parent IAG (LON:ICAG), Wizz Air (LON:WIZZ), EasyJet (LON:EZJ) and Ryanair (LON:RYA) all saw shares take-off to begin the quarter.

Other domestic leisure stocks were also higher after UK Prime Minister Boris Johnson appeared confident that the unlocking can resume on July 19th despite rising Covid cases. Johnson said it was “ever clearer” that the speed of the vaccine rollout has broken the link between cases and deaths, although warned that some extra precautions may be needed.

Cinema chain Cineworld (LON:CINE), bingo hall Rank Group (LON:RNK) and pub stocks such as Mitchells & Butlers (LON:MAB) and J D Wetherspoon (LON:JDW) all rallied.

GBP fell after comments form the Bank of England Governor Andrew Bailey, who warned that it was important not to overreact to soaring growth and inflation.

“It is important not to overreact to temporarily strong growth and inflation, to ensure that the recovery is not undermined by a premature tightening in monetary conditions,” Bailey said.

The comments sent GBP/USD to its lowest level since 16th April and EUR/GBP to its highest since 15th June.

Cryptocurrencies were soft with Bitcoin trending back towards $33,000 before finding support ahead of the figure. Ethereum had been slightly outperforming in the morning but also pared gains although remains firmly above the $2,000 level.

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