Travel Stocks Soar On Holiday Hopes While India’s Crisis Hits Oil

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Two-speed Covid recovery – travel stocks soar on holiday hopes while India’s crisis hits oil

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"A glimpse of a post crisis future was captured today, where the haves and the have nots will be decided on the speed of vaccination programmes in countries around the world.

Travel Stocks Soar

Travel stocks soared higher during the London session today as hopes lifted that a big rescue could now be on the cards for the summer season, with the introduction of vaccine passports. Comments in the US media made by European Commission President Ursula von der Leyen indicated that European destinations would be open for inoculated Americans. The prospects of vaccine passports put a spring in the step of IAG, the owner of British Airways and jet engine maker Rolls-Royce which were the top risers on the FTSE 100, helping propel the index into positive territory.

But as US and European citizens hang onto hopes for summer holidays abroad, in India the Covid disaster is accelerating. The crisis, exacerbated by a lack of investment in medical infrastructure, has pulled oil prices lower with weaker demand expected in the country which is the world’s third largest crude importer. Pledges of help are coming in thick and fast with governments around the world offering oxygen supplies and medical equipment and this show of solidarity may have helped limit losses to some extent. It’s not simply altruistic. There is a fear that further mutant strains of the virus could emerge in India with infections concentrated in highly populous areas. The worry is that new mutations could weaken the effectiveness of vaccines and lead to fresh restrictions in economies which have begun to bounce back from what was hoped to be the worst of the pandemic.

There is already a two-speed recovery from Covid emerging, but now there is growing recognition that if countries are left too far behind, it will have far-reaching implications for a sustained global economic recovery."

Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown

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