The FTSE 100 rose as lower oil prices supported travel and leisure shares while weighing on major energy companies.
The index gained 0.4% to reach around 10,781 in early trading. Oil prices fell by more than 6% to approximately $90 a barrel after a pause in hostilities between the United States and Iran reduced immediate concerns about energy supply disruption.
The oil price fall created a clear split across the London market. Travel and leisure companies benefited because fuel represents a major operating cost for airlines and other transport businesses. The sector rose by around 2.3%, led by International Airlines Group, which gained 2.8%. Hotel operator Whitbread advanced by 2%.
Lower oil prices can improve expectations for airline margins by reducing projected fuel costs. However, the financial effect may take time to appear because many airlines hedge part of their fuel requirements in advance.
Energy companies moved in the opposite direction. The UK energy sector fell by around 2.5% as the decline in crude prices reduced expectations for producer revenue and cash flow. Large energy groups carry significant weight in the FTSE 100, so their weakness restricted the index’s overall advance even as travel shares moved higher.
Company updates also contributed to the session. Vodafone rose by 4.5% after raising its outlook, signalling improved confidence in its operating position. AstraZeneca gained 1.6% after reporting profit above expectations and maintaining its forecasts.
These updates provided support outside the travel sector and helped offset some of the pressure from energy shares. Vodafone’s revised outlook may reduce uncertainty around its near-term direction, while AstraZeneca’s decision to retain its forecasts suggests that management remains comfortable with its current expectations.
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