Shares in easyJet and other travel firms were long due a quarantine tumble

For once, I find myself in agreement with Grant Shapps. How on earth, he said, can anyone have been surprised by the quarantine on French travellers?

It was first trailed over a week ago that France could be added to the bogeyman list, and the infection rate has been rising nastily ever since.

Yet today, the stock market fell sharply as travel shares tumbled.

So, what’s going on?

First off, it’s worth remembering shares have been on a decent run through August.

And, as with most such surges, some sectors have been lifted by the rising tide undeservedly.

Travel is one.

The FTSE-250 Travel and Leisure Index, where you find easyJet and Tui, surged 18% this month. The FTSE-250 only did 7%.

True, the outperformance did follow months of lagging behind the wider market. But even with improving bookings over summer, the gains looked hugely overbaked.

This is a highly volatile sector and there’s a fair chance the bulls will regain the upper hand when trading resumes on Monday. After all, most City analysts still believe airlines and hotels are undervalued. But these are the same guys who recommended you backed easyJet’s share issue at 703p in June. They’re now 568p.

If Covid has taught us anything, it’s that it always has the potential to disrupt travel more than you feared.

Today’s action against France was predictable a week ago, but not a month back.

Travel stocks are at the leading edge of this uncertainty. For me, that makes them uninvestable.