IAG, Wizz Air and IHG lifted as oil prices tumble

British Airways owner International Consolidated Airlines Group SA (LSE:IAG) , Intercontinental Hotels Group PLC (LSE:IHG) and Wizz Air Holdings PLC (AIM:WIZZ) shares rose on Monday as hopes of a diplomatic breakthrough between the US and Iran sent oil prices sharply lower and improved sentiment towards travel companies.

US President Donald Trump said he had cancelled planned strikes against Iran after appeals from Gulf allies, and added that fresh talks with Tehran would begin on Monday. Trump said a possible agreement would include the immediate and complete reopening of the Strait of Hormuz and an end to Iran's nuclear threat. Iranian officials separately said negotiations with Oman over a new shipping route through the strait were nearing completion.

Brent crude oil tumbled 4.5% to just under $84 a barrel as the developments reduced fears of further disruption to oil supplies and international travel.

Lower oil prices supported IAG and budget carrier Wizz Air, up 2% and 4.4% respectively, as fuel is one of the airline industry's biggest costs, while last week's results from easyJet showed that travel booking demand had also weakened.

Hotel groups IHG rose 2.1% and Whitbread PLC (LSE:WTB) , which owns Premier Inn, advanced 1.5% as investors welcomed the possibility of a more stable outlook for international travel.