Royal Dutch Shell and BP stocks fell due to concerns over the global demand for oil.
Andrey Rudakov/Bloomberg News
U.K. stocks tumbled on Friday, as the travel industry was dealt another blow and major oil companies were put under pressure by falling crude prices.
The FTSE 100 UKX, -1.44% index tumbled 1.5% and the FTSE 250 MCX, -0.99% dropped 1% on Friday, as the U.K. government’s decision to add France and the Netherlands to its quarantine list hit travel and leisure stocks.
From Saturday, travelers arriving in the U.K. from those countries will be required to self-isolate for 14 days. The latest setback to the travel sector saw airlines suffer heavy losses early on Friday, with easyJet, British Airways owner IAG IAG, -5.45%, and Ryanair RYA, -4.75% all tumbling. Travel operator Tui TUI, -5.80% was set for a second day of substantial losses, after disappointing earnings on Thursday. It wasn’t just airlines feeling the effects of a decision that will likely lead to canceled flights and postponed holidays, as hotel chains Whitbread WTB, -2.73% and Intercontinental Hotels IHG, -1.86%, and aircraft-engine maker Rolls-Royce RR, -4.25% were also among the sharpest fallers.
Major oil companies BP BP, -2.59% and Royal Dutch Shell RDSB, -2.49% also contributed to the index’s slump, as falling Brent crude prices pushed them both lower. October Brent crude BRN00, -0.31% slipped 1% to $44.96 a barrel on Thursday, as investors digested a weaker demand outlook. The International Energy Agency deepened its forecast for a contraction in global demand for 2020. It now expected demand to contract by 8.1 million barrels a day year on year.
An unexpected fall in Chinese retail sales in July raised questions over the country’s economic recovery and added to the negative sentiment.
Stocks in focus
Budget carrier easyJet EZJ, -7.17% raised an extra £203 million from the sale and lease-back of its aircraft, in a bid to shore up its balance sheet. The company has now raised more than £600 million from the sale of 23 aircraft. However, the announcement was overshadowed by the U.K.’s quarantine measures and the stock fell 6.4%.
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