Why these top 4 ASX travel and airline stocks surged on Tuesday
With BioNTech and Pfizer announcing a potentially game-changing covid-19 vaccine overnight, ASX-listed travel and airline stocks surged when trade resumed on Tuesday.
The beginning of a sharp rotation?
Airline and travel stocks have been some of the worst hit as a result of the coronavirus pandemic.
Indeed, just a month ago, a bet on the recovery of airline stocks might have just been the ultimate contrarian play: planes have been grounded, cash flows have been squeezed and the outlook for the industry was marred by deep uncertainty.
That uncertainty appears to have diminished significantly almost in a flash, with biotech giants BioNTech (+13.91%) and Pfizer (+7.69%) overnight announcing that its coronavirus vaccine had proved to be more than 90% effective during its recent phase 3 study – conducted with more than 40,000 participants.
‘Today is a great day for science and humanity. The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19,’ said Pfizer’s CEO Dr Albert Bourla.
Qantas, Webjet and Sydney Airport share prices surge on vaccine assumptions
The promise of an effective vaccine saw the Australian market split down the middle, as many of the stocks hyped up during the pandemic were sold off. On the one hand, investors bid up beaten down and out-of-favour stocks such as airline and travel stocks to new multi-month highs. Looking at the price action from the open:
- Qantas surged 11% to $5.2 per share
- Webjet rose 13.5% to $4.86 per share
- Sydney Airport climbed 15.8% to $7.0 per share
- Flight Centre soared 14.75% to $16.49 per share
Ultimately, while the prospect of a vaccine unlocking international travel sooner than previously expected would be a distinct positive for ASX-listed travel and airline stocks, it should be noted that BioNTech and Pfizer’s vaccine, though promising, still must be approved by the FDA. Both companies are currently collating the relevant efficacy as well as safety and manufacturing data to that end.
Despite that hurdle, it was noted that some 50 million vaccine doses could be produced by the close of 2020 and as much as 1.3 billion doses in 2021.
E-commerce stocks plunge
Of course, while airline and travel stocks were bid higher on the prospect of sooner-than-expected international air travel; ASX-listed ecommerce stocks, that proved so popular amongst investors during the height of the pandemic, were abandoned by the market.
By 11:10AM, art-focused online marketplace Redbubble had seen its share price fall 17.81% to $4.06 per share; online furniture dealer Temple & Webster had crashed a staggering 19.92% to $10.01 per share, and meals delivery company Marley Spoon was down 20.46%, to 2.06 per share.
How to trade ASX travel stocks
You can use CFDs to trade some of the airline and travel stocks we have discussed today – LONG or SHORT – through IG’s world-class trading platform now. For example, to buy (long) or sell (short) Sydney Airport using CFDs, follow these easy steps:
- Create an IG Trading Account or log in to your existing account
- Enter ‘Sydney Airport’ or ‘SYD’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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