FTSE 100 slides as investors punish travel-related stocks; Vodafone stock shines

UK stocks declined after a series of weak corporate and economic data. The blue-chip FTSE 100 index declined by more than 1.10% led by travel-related companies like Carnival, Intercontinental, and EasyJet. This is after it emerged that the country could be in a longer lockdown than earlier expected.

Travel stocks push UK stocks lower

Carnival, the cruise line giant, was the worst-performing company in the FTSE 100 index as its stock dropped by more than 8 per cent. IHG, the owner of Intercontinental Hotels was the second-worst performing followed by IAG (owner of British Airways) and EasyJet, the budget carrier.

The market is concerned that these companies will be hit hard as the lockdown continues. Also, the companies reacted to news that TUI, the travel company, was planning to shed more than 8,000 jobs. The company said that its cost had increased by between 250 and 300 million pounds per month. It expects refunds for holidays to jump to 500 million per month.

Vodafone continues to shine

Vodafone was the best-performing company in the FTSE 100 index after the solid earnings. The company said that its full year earnings rose by 2.6% to $16.10 billion. In a statement, the management said that it was seeing direct impact on its roaming business because international travel had stopped.

Other best-performing stocks in the FTSE 100 were Berkeley, Spirax-Sarco Engineering, and Hikma Pharmaceuticals.

UK stocks are also reacting to the weak GDP data that were released earlier by the ONS.

In total, only about 14 companies in the FTSE 100 index rose today.

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FTSE 100 technical outlook

On the daily chart, we see that the FTSE 100 index has found some strong resistance around the 38.2% Fibonacci retracement level. The price is also slightly below the 50-day EMA and is moving higher, being guided by the pink trendline. Therefore, I expect bulls to remain in control as they start targeting the 50% retracement at 6219.

On the flip side, a move below the important support at 5,634 will invalidate this trend. This support is at the intersection of the pink trendline and the lowest swing on May 4.

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