FTSE 100 rebounds, GBP tumbles, Bitcoin falls below $30,000

Key Points

FTSE 100 closing price of 6,881.2, +0.54%
Airlines in focus after EasyJet trading update
Morrisons M&A picture becomes clearer
GBP falls on fears “pingdemic” could hurt the recovery
Oil steadies after 7% sell off
Bitcoin cracks, falls below $30K
By Samuel Indyk

Investing.com – The FTSE 100 rebounded from its worst day since 11th May to close higher although the index finished off best levels.

Rolls-Royce (LON:RR) was one of the best performing stocks in the blue-chip index after Citigroup (NYSE:C) said the company might be a good long-term recovery play, although they admitted that the trade would be risky and they don’t know exactly when the wide-body civil aviation market will recover.

Separately, there were reports that the company, along with one of its partners Babcock International (LON:BAB), had hired banks to sell their stakes in AirTanker, the company behind the RAF’s Voyager refuelling fleet, according to Sky News.

No financial details about any potential deal were available and it is unclear exactly how much the company could be worth; however, it is not a surprise to see Rolls-Royce looking to dispose of another asset as the pandemic has impacted revenue in a company that was already struggling before the coronavirus affected international travel.

Some travel stocks showed signs of a rebound on Tuesday following the sharp selling on Monday’s session. Tour operator Tui (LON:TUIT) saw its shares rise over 3% and cruise liner Carnival PLC (LON:CCL) gained over 3.5%.

Most of the airlines, which took a battering on Monday, were trading marginally higher on Tuesday. EasyJet (LON:EZJ) shares swung between gains and losses after the company said it plans to fly 60% of its pre-pandemic capacity in the July-September quarter, from 17% in the three months prior.

Morrisons (LON:MRW) shares were in focus after the Apollo Global Management said they would not be bidding for Morrisons on their own, instead they were in discussions with Fortress to join a consortium to purchase the grocery retailer.

GBP/USD hit its lowest level in five months as GBP continues to tumble despite the second day of “Freedom”. Covid cases remain elevated in the UK which is threatening the recovery as hundreds of thousands are told to self-isolate, in what some are calling a “pingdemic”. There are fears that retail, logistics and manufacturing industries could face a shortage of workers as people are forced to quarantine having come into contact with someone with the coronavirus.

Oil had a more stable day after the 7% decline on Monday. WTI had dropped to its lowest level since 24th May in the European morning before staging a rebound as markets get to grips with the new OPEC deal and the impact rising Covid cases may have on global oil demand. Brent showed similar price action, dropping to its lowest level since 24th May before staging a rebound back above $69 per barrel.

Cryptocurrencies continued to suffer losses with Bitcoin dropping back below $30,000 and failing to reclaim the psychological level.

“Investors edged away from crypto wallets after stocks plunged, with Bitcoin dropping below $30,000 to hit $29,577 the lowest level since June 22,” said Hargreaves Lansdown (LON:HRGV) senior investment and markets analyst Susannah Streeter. “Ethereum and Dogecoin have also suffered steep falls over the past 24 hours, with Cardano falling by more than 10% as investors pulled back from riskier assets in the search for safety.”

The cryptocurrency space wasn’t helped by reported that the European Union is looking to crack down on anonymous crypto wallets. Reuters reports that companies that transfer Bitcoin or other cryptoassets must collect details of the senders and recipients to help authorities crack down on illicit activity.