Travel stocks sink, Amazon probe, UK property boom

BA and other airlines' shares sank on Monday. Photo: Stefan Wermuth/Reuters
BA and other airlines’ shares sank on Monday. Photo: Stefan Wermuth/Reuters

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world:

European travel stocks sink as Germany slaps quarantine on Spanish travellers

Leading European travel stocks sank as much as 1.7% in early trading on Monday, as gloom over rising infection rates in parts of Europe hit the sector’s prospects.

Germany’s health minister Jens Spahn hit out at “irresponsible” party holidays in Spain during the pandemic as he defended measures likely to limit German travel to the country.

Germany designated most of Spain including Mallorca as an at-risk region, meaning those returning from travel there face two weeks’ quarantine or a test.

Cases have risen recently in both countries, but the move is a major blow to Spanish tourism after the UK imposed similar quarantine rules on its most popular overseas holiday destination.

Travel and leisure stocks on the Europe-wide Stoxx 600 (^STOXX) index were down 0.7% at around 10am in London. They have seen more than a third of the value of their shares wiped out since the start of the year by the coronavirus crisis.

British Airways owner IAG (IAG.L) was the biggest faller on the FTSE 100, down around 3.2% in mid-morning trading.

Germany’s federal cartel office (BKA) has started an investigation into whether Amazon (AMZN) is abusing its market dominance to harm third-party sellers on its platform in Germany.

“We are currently investigating whether and how Amazon influences the price-setting of third-party traders on the marketplace,” Andreas Mundt, president of the cartel office, told the Frankfurter Allgemeine Zeitung newspaper.   

He told the newspaper that his office had received complaints that Amazon had blocked some sellers at the beginning of the coronavirus outbreak, alleging that their prices were too high.

An Amazon spokeswoman said that the company’s policies were geared towards ensuring that traders on its site set competitive prices.

“Amazon selling partners set their own product prices in our store,” the spokesperson said. “Our systems are designed to take action against price gouging,” she said, adding that those who had concerns should contact its support team for its merchants.

Post-lockdown house sales have accelerated in recent months rather than slowed down as usual during the summer, according to research by Rightmove.

Normally, a seasonal slowdown in housing market activity is expected during the summer as many home buyers and sellers go away on holiday.

But this year, home movers have put more properties on the market and agreed more sales in July than in any month for over ten years — worth a record total of over £37bn ($48bn).

The mini-boom since lockdown restrictions eased and stamp duty cuts were announced is leading to monthly price increases in ten out of twelve regions.

At this time of year, there is usually a fall in prices, with the national average monthly fall for the last 10 years being 1.2%.

The data showed only a slight monthly fall of 0.2% or £768 this year, with London pulled down the national asking price trend, with the average price tag on a home there falling by 2% month on month.

“I suspect that the market will remain buoyant until job losses filter through and really start to hit the market in full force and mortgage-ability starts to be questioned,” said Dominic Murphy, managing director of DM & Co. Estate Agents.

Britain’s FTSE 100 (^FTSE) opened higher on Monday, as Chinese demand for oil lifted leading UK mining stocks.

West Texas Intermediate crude and brent oil futures were trading 0.7% higher after Reuters reported China’s state-owned oil firms planned to ship at least 20 million barrels of US crude in August and September.

It came as China’s central bank also rolled over medium-term loans and kept borrowing costs steady for lenders, helping to lift Chinese stocks and investors’ confidence in the country’s recovery.

The Shanghai Composite Index (000001.SS) gained 2.3%. The Hong Kong Hang Seng index (^HSI) also gained 1%.

Most European indices followed Chinese stocks higher on Monday. Britain’s FTSE 100 (^FTSE) and Germany’s DAX (^GDAXI) were both up 0.3% on the open, while France’s CAC 40 (^FCHI) rose 0.5%. The pan-European Stoxx 600 (^STOXX) rose 0.2%.

Stocks also looked set to open higher in the US. S&P 500 futures (ES=F) were trading 0.3% higher, Dow Jones futures (YM=F) were up 0.4% and Nasdaq futures (NQ=F) were up 0.5%.

But Japan’s Nikkei (^N225) lost 0.8% after figures showed the world’s third largest economy shrinking by a worse-than-expected 7.8% in the second quarter.