By Samuel Indyk
Investing.com – The UK travel & leisure sector was leading the gains in the stock market on Wednesday amid hopes that the sector will continue to recover.
The FTSE 350 Travel & Leisure sub-index was trading higher by around 4.0% with most of its constituents in the green.
IAG (LON:ICAG) led the way higher after a positive note from Stifel Nicolaus. The British Airways parent was named a “top pick” by the broker who gave a positive outlook on the industry as a whole.
“We believe the combination of vaccinations, forthcoming COVID drugs, milder symptoms of the Omicron variant and increasing political laissez-faire sets the scene for a dynamic traffic recovery this summer and the crisis potentially moving to its end-game,” Stifel said in a research note.
Other airlines and travel stocks were also trading higher.
EasyJet (LON:EZJ) shares were up 5.6% while Wizz Air (LON:WIZZ) shares were trading higher by 4% following third quarter results.
The budget airline said its loss in the fourth quarter would be greater than the third quarter loss of €213.6 million but expected the recovery to pick up later in the year.
“The emergence of the Omicron variant and renewed travel restrictions impacted our trading performance late in the quarter and we expect demand in January, February and part of March to be impacted by ongoing travel uncertainty,” Wizz Air CEO József Váradi said.
“Despite the short-term headwinds, we are cautiously optimistic for a continued recovery into Spring and near-full utilisation from Summer onwards.”
Tour operators Tui (LON:TUIT) and Jet2 (LON:JET2) were trading higher by 4.9% and 5.9%, respectively.
Shares in cruise line operator Carnival (LON:CCL) were higher by 6.0% and jet engine manufacturer Rolls-Royce (LON:RR) was trading higher by 3.0%.
Shares in gaming company Playtech (LON:PTEC) were the only ones trading lower in the FTSE 350 Travel & Leisure index after news that the company is reportedly exploring a break up if the takeover by Aristocrat Leisure is blocked by shareholders at next week’s vote.