Market close

Blue chips in New Year surge as fears subside

British Airways pic

London close: Blue chips soared in London amid greater optimism over the impact of the Omicron variant. At the close of the opening session of the year, the FTSE 100 index increased 120.61 points, or 1.63%, to hit 7,505.15.

Chris Beauchamp, chief market analyst at online trading group IG, said investors were also losing their inflation fears, at least for the time being.

Travel company stocks fared particularly well, with British Airways owner International Consolidated Airlines, topping the risers with an 11.3% surge to 160p.  

“The FTSE 100 has started the year with a solid set of gains, pushing above 7500 for the first time in almost two years,” said Mr Beauchamp.

Banks were also in demand. Barclays and HSBC both posted rises of more than 5% while Lloyds Banking Group advanced 2.0% to 49.84p.

Danni Hewson, AJ Bell’s financial analyst, said: “London’s markets might be a day late to the party, but they were quick to catch onto the global mood.

“Travel stocks helped both the FTSE 100 and FTSE 250 deliver toast worthy gains, investors buoyed by Wizz Air’s passenger numbers for the dying days of 2021 and the belief that Omicron might not wreck the damage on economies previous Covid variants have done. 

“Optimism is the name of today’s game and investors are right to make hay whilst winter sun is shining because 2022 has plenty of storms brewing on the horizon.  

“For once it seems oil production isn’t one of them. OPEC+ has agreed to the expected production increases next month as the world plods its way into the new year, slow but steady progress which many feared was in jeopardy just a few short weeks ago. 

“Inflation might not be to Goldilocks’ taste, but the oil price is being kept at a steady, if slightly warmer temperature than the consumer might like, but right on the money for producers.” 

Before the open, transport group Go-Ahead requested suspension of its shares to give its auditor Deloitte more time to prepare its annual results for the year ended 3 July.

The company’s 2.50% guaranteed bond due 2024 is also temporarily suspended with effect from 7.30am today.

Go-Ahead said it continues to work closely with Deloitte to ensure the FY21 Results are published as soon as possible. This is expected to be before the end of January.

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