Why is Qantas’ share price rallying?
Shares in the national airline have grown by nearly 9% over the last month as investors anticipate growing travel demand.
Airline operator Qantas has seen strong gains in the morning trading session, as market sentiment improves for travel stocks.
Despite COVID restrictions on travel, a rapidly improving vaccination rate has seen travel stocks gain, while much of the market is in the red.
At the time of writing, Qantas was bucking the market trend, up by 0.97% to $5.74 a share, while the overall ASX200 had fallen by 2.34%.
Beating the market
The Australian share market is giving back most of yesterday's gains off the back of a disappointing night of trading in the US.
All 3 US markets were down with the Dow Jones falling 1.6%, the S&P 500 down 1.2%, and the Nasdaq 100 dropping 0.45% overnight.
The falls in the US market saw Australia's market mostly end up in the red during morning trading.
Following a tumultuous time for the airline during COVID restrictions, the expectations of borders reopening were seen as a strong sign for investors to buy.
Dreams of taking a holiday
Yet to receive official confirmation, much of the changing sentiment around travel stocks is due to high vaccination rates and the expectations of reopening international borders.
With national cabinet meeting later today Aussies who are dreaming of a vacation are set to take to the sky from November.
While Australia's domestic borders remain closed due to state restrictions, Sydneysiders could be taking to the sky from November, as the state's vaccination rate reaches 80%.
As part of the arrangements, returning travellers will only need to undertake 7 days self isolation in their homes, with the airline predicting strong uptake on international travel should restrictions ease.
Despite a strange situation where Sydneysiders can go to Paris but cannot travel to Perth, the market overall responded well to this leaked announcement.
The good news for Qantas was shared around, with domestic airline REX seeing a 0.3% jump in share price, with Webjet and Flight Centre also seeing gains. However, shares in Corporate Travel Management regressed during morning trading.
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