FTSE up as banks and miners recover, while TUI jumps on positive update

Leading shares have moved higher after recent uncertainty, lifted by a revival in Deutsche Bank and rising commodity prices.

Travel group TUI is among the biggest gainers so far, up after it raised its profit guidance for the year. It said it expected 12%-13% growth compared to an earlier estimate of a 10% rise. Holiday firms have been hit by fears of terrorist attacks, and concerns about a falling number of UK tourists, thanks to the weakness of the pound following the Brexit vote. But TUI said bookings from Britain were up 5% in the summer, defying these fears. It is also less exposed to troubled Turkey than rival Thomas Cook. Analysts at Stifel said:

In the UK market, demand has remained resilient with TUI benefiting from its positioning in the upper end of the mass market with a product offering which has improved in recent years. Neither Brexit nor the weakness of sterling appears to have impacted demand with revenues and bookings up 5% for Summer 2016. In Germany, while market conditions are difficult, TUI has increased market share and benefited from its more integrated model. Losses in France should be materially reduced from the €40m incurred last year, but against this profits are expected to be lower in Nordics, largely as a result of reduced demand to Turkey and the contribution from Belgium will be impacted by the attack at Brussels airport.

Elsewhere hopes that Deutsche Bank could dig its way out of its current problems lifted its hard hit shares and supported the banking sector. Barclays is 1.75p better at 167.7p while Royal Bank of Scotland has risen 2p to 176.6p after it agreed to pay $1.1bn to settle some of its US mortgage claims.

Despite little chance of oil producers agreeing to curb output at a meeting in Algiers, crude prices have edged higher after their recent falls, with Brent 0.72% higher at $46.3 a barrel. Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said:

European equity markets are positive, following oil prices higher, as investors eye Algiers in the hope that today’s OPEC meeting will reach some compromise. Although an agreement to curb output today would be a major surprise, the debate may pave the way for a potential deal at their next meeting.

So commodity prices have moved ahead, helping mining companies gain ground. Anglo American has added 25.4p to 942.2p while Rio Tinto has risen 66.5p to 2526.5p.

But Sainsbury is down 7.3p to 243.5p as it reported a 1.1% fall in second quarter like for like sales and warned of a continuing tough market.

Royal Mail is down 8.2p at 494.8p on competition fears as Deutsche Post agreed to buy smaller rival UK Mail for £243m. Liberum analysts said:

UK Mail competes with Royal Mail in bulk letters and parcels. We would expect it to become a much more powerful competitor with the backing of a much larger, financially stronger and ambitious owner.