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Ryanair Chief Executive Michael O’Leary.
kenzo tribouillard/Agence France-Presse/Getty Images
The London stock market was a tale of two sectors on Monday, with the travel sector getting hit hard by the U.K. decision to quarantine visitors from Spain, while the mining sector advanced off the rally in gold and silver prices.
U.K.-listed travel stocks slumped on the surprise decision to quarantine visitors from Spain. Decliners included airlines International Airlines Group IAG, -7.37%, Ryanair RYA, -4.77% and easyJet EZJ, -11.03%, travel firm TUI, -12.10%, and engine maker Rolls-Royce RR, -3.91%, which separately had its credit rating downgraded.
“They should have, in my view, have controlled arrivals back in from maybe Catalonia or do it on a regional basis,” said Michael O’Leary, the outspoken chief executive of Ryanair, which reported a loss for the June-ending quarter.
“But to do it on a national basis, there’s no scientific basis for a national restriction on visitors coming back from Spain to the U.K. in much the same way that we wouldn’t expect other EU countries to ban all of, or to impose quarantine on all, U.K. visitors just because there’s been a spike up in Leicester,” he said. O’Leary said the airline has become used to the “U.K. government mismanaging COVID-19.”
He said the biggest challenge facing Europe will be managing the return to schools in September. “And to the extent they successfully manage to return to schools, we think there will be some return to some level of normality of business travel. If that doesn’t happen, then we think business travel will also be badly affected through September and October,” O’Leary said.
Mining stocks were as hot as airlines were cold, as gold futures reached a record high and silver futures SI00, +7.04% continued their recent rally to a nearly seven-year high. Polymetal International POLY, +6.34%, Fresnillo FRES, +4.19% and Antofagasta ANTO, +2.52% all gained ground.
“In this uncertain scenario, investors are filling their portfolio with gold to be protected not only from a stock correction, but also from the risk of further greenback declines. In other words, gold in this phase is seen as insurance from turbulence on currencies markets. While currencies can all be printed, the finite nature of gold and silver makes them better stores of value at these times of uncertainty,” said Carlo Alberto De Casa, chief analyst at ActivTrades.
The FTSE 100 UKX, -0.16% overall eased 0.2%.
