The Webjet share price has today jumped by 6% to $5.95, as airlines and travel-related shares on the ASX flew higher on vaccine optimism.
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Webjet Limited (ASX: WEB) shares are rising today, as airlines and travel-related shares on the ASX flew higher on the back of optimism that the soon-to-be available COVID-19 vaccines will restart international travel. At the time of writing, the Webjet share price has today jumped by 6.42% to $5.97. The broader S&P/ASX 200 Index (ASX: XJO) has also erased its losses for 2020 this morning, as it closes in on the 6,700 level. The ASX 200 is currently sitting at 6,698.90, up by 0.64% today.
The move in the ASX 200 follows the rise in United States stocks overnight, where the Dow Jones Industrial Average Index (DJX: .DJI) hit a record 30,000 level for the first time ever.
Other ASX travel shares rising today
Along the with the Webjet share price, the Qantas Airways Limited (ASX: QAN) share price is also rising, currently up by nearly 2% to $5.68.
The move in the Qantas share price follows a comment by its chief, Alan Joyce, who said yesterday he believes “all Aussies could be travelling back and forth to New Zealand in the early New Year”. Joyce also said that July 2021 will be the turning point for international travellers, and that Qantas expects to have reactivated its long haul international aircrafts by that time.
Trade Minister, Simon Birmingham, meanwhile offered a more cautious outlook, saying that future travel hinges on the effectiveness of the vaccine. He said the manufacturing, distribution and all the other factors surrounding the vaccine will determine whether Australia could turn things around in the next 12 months. Flight Centre Travel Group Ltd (ASX: FLT) and Corporate Travel Management Ltd (ASX: CTD) shares are also marching higher today.
Optimism in the United States
The news of President Trump’s concession to the new Biden administration has also paved the path for a smooth transition of power in the world’s largest economy. The expectation of a more stable political environment in the US, along with the vaccines, has given a degree of stability and confidence back to the market.
Global market strategist at Invesco Ltd (NYSE: IVZ), Brian Levitt, says, “The market is focusing beyond the next few weeks and is pricing in a recovery as 2021 progresses. What you’ll end up having is an environment that over the next couple of years should be good for risk assets.”
The market was also boosted by a comment from Bill Gates who said he is “optimistic that by February, it’s very likely that all three vaccines will prove very efficacious and safe.”
However, Gates provided caution for the next 6 months, saying that the daily death rate from the virus could possibly top 2,000 per day for much of the winter.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.