The Flight Centre Travel Group Ltd (ASX: FLT) share price has added 1.68% on Wednesday to $14.55, near to breakeven for the week.
The resurgence of COVID-19 cases and emerging Delta variant, both in Australia and globally, has weighed in on sentiment for airline and travel shares this week.
A sharp sell-off on Monday night saw high-profile American airline shares such as Boeing, United Airlines and American Airlines slide between 4% and 5.5%.
This led to the Flight Centre share price briefly sliding to a six-month low of $14.13 on Tuesday.
Many states, including Victoria, New South Wales and South Australia, have imposed various lockdown measures. So what’s going with the Flight Centre share price?
A light at the end of the tunnel?
The Reserve Bank of Australia (RBA) released its July monetary policy meeting minutes on Tuesday, with the board saying:
As vaccinations had increased and hospitalisations remained at low levels, population mobility had recovered considerably in many countries, including in the North Atlantic, where stringent restrictions that had been in place earlier in the year had been relaxed.
This relaxation of containment measures had expanded opportunities for the consumption of discretionary services, including contact-intensive activities such as dining out and domestic air travel. There had been a tentative restart to international tourism in some countries, particularly within Europe.
The RBA noted that the “Australian economy was transitioning from recovery to expansion”. This is despite many major cities entering lockdown in the last week or two.
“As observed following earlier lockdowns, spending was expected to rebound when containment measures were eased.”
Flight Centre share price struggles to hold intraday highs
The Flight Centre share price was 3.21% higher around lunch time, hitting an intraday high of $14.79.
Unfortunately, it couldn’t hold onto these gains, closing 1.68% higher at $14.55.
Interestingly, the US Global Jets exchange-traded fund (ETF) rallied 5.05% on Tuesday night.
The ETF is an index of global companies including airlines, manufacturers, airports and terminal services.
The ETF has a small allocation (1.85%) in ASX-listed air travel shares.
The post The Flight Centre (ASX:FLT) share price is up today, despite lockdowns appeared first on The Motley Fool Australia.
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More reading
- What happened on the US stock market overnight and how could it impact ASX shares?
- Here’s why the Flight Centre (ASX: FLT) share price is down 5% in the last week
- These are the 10 most shorted ASX shares
- Fund manager sees Webjet (ASX:WEB) share price as ‘golden’ opportunity
- Broker says Webjet (ASX:WEB) share price weakness is a buying opportunity
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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