By Jack Denton
Tough restrictions on people traveling from the U.K. and four other countries to Germany have been eased, opening up quarantine-free travel for fully vaccinated visitors and those with COVID-19 antibodies.
Shares in European airlines, which are sensitive to developments in the COVID-19 picture in the region, lifted off on Tuesday but later took a nosedive. International Airlines Group /zigman2/quotes/208070069/delayed UK:IAG -2.24% — the owner of British Airways and other carriers — gained alongside Lufthansa /zigman2/quotes/201210530/delayed XE:LHA -3.06% , Air France-KLM /zigman2/quotes/205396176/delayed FR:AF -2.24% , and low-cost carriers Ryanair , easyJet /zigman2/quotes/202825892/delayed UK:EZJ -2.14% , and Wizz Air /zigman2/quotes/210449062/delayed UK:WIZZ -1.94% , before all the stocks gave up ground as stocks across Europe fell.
The decision to remove the U.K., as well as Portugal, Russia, India, and Nepal, from the list of Germany’s “virus variant” areas came just days after a meeting between U.K. Prime Minister Boris Johnson and German Chancellor Angela Merkel.
The five countries are now considered “high incidence” areas. Fully vaccinated inbound travelers, as well as those with COVID-19 antibodies, need not be quarantined upon arrival in Germany, and unvaccinated visitors who test negative for coronavirus after five days can avoid a 10-day isolation period.
Merkel had been one of the European Union’s loudest voices for careful travel restrictions to contain the spread of the more infectious delta variant of coronavirus, which has emerged as the dominant strain in the U.K. and other countries.
Airline stocks added lift to major European stock market indexes, which traded slightly lower on Tuesday but remained near all-time highs.
The pan-European Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP -2.16% was 0.5% lower, while in London the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -1.46% declined 0.9%. Paris’ CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -2.21% fell 0.9% and the DAX /zigman2/quotes/210597999/delayed DX:DAX -2.44% in Frankfurt was almost 1% lower. Stocks fell in the U.S., as well, with Dow industrials /zigman2/quotes/210598065/realtime DJIA -0.04% down more than 330 points by midday after markets were closed for Independence Day on Monday. The index rallied 152 points on Friday to 34,786.
U.S. stocks hit new highs on Friday, with the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.29% marking a seventh-straight record close for the first time since 1997 , after a better-than-expected jobs report. Analysts noted that the macro picture remained unchanged for markets as the U.S. emerged from a long weekend.
“Indeed the most consequential story of [Monday] was probably that around oil where the failure to reach a deal at the latest OPEC+ talks sent prices up to fresh two-year highs,” noted a team of strategists at Deutsche Bank led by Jim Reid.
“Some members of the group including Saudi Arabia had been hoping to increase production over the coming months, but the U.A.E. had refused to agree and sought better terms that would change how its quota is calculated and allow it to produce more,” Reid added.
The news from the group of oil-producing countries sent crude prices to their highest since October 2018, with international benchmark Brent trading above $77 a barrel before falling back below $74.
The major European-listed oil companies rose in kind, with shares in BP /zigman2/quotes/202286639/delayed UK:BP -2.24% , Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA -1.90% , Total /zigman2/quotes/206172043/delayed FR:TTE -2.51% , and Eni /zigman2/quotes/209584888/delayed IT:ENI -1.81% higher before the stocks all gave up gains to close lower by day’s end.
Ocado /zigman2/quotes/207225647/delayed UK:OCDO -1.51% stock rose more than 2%, before falling more than 4% lower, after the grocery-delivery company and robotics-logistics group reported half-year revenue and earnings ahead of analysts’ expectations. A key rival to online retailer Amazon /zigman2/quotes/210331248/composite AMZN -1.25% in the British online grocery market, Ocado is also the high-tech logistics partner of U.S. retailer Kroger /zigman2/quotes/206215053/composite KR +0.24% .
Shares in Alstom /zigman2/quotes/209823934/delayed FR:ALO -5.64% fell 8.5%, as the French train and railway manufacturing group updated investors in a capital markets day. The company said the financial year 2021/2022 will be a transition period as it stabilizes after acquiring Bombardier Transportation.