Daily Business Live

London pares gains on Omicron overhang


5pm: Stocks close higher

Stocks in London burst into life after the festive break on hopes over Omicron’s impact on growth, but were dragged back later in the session and the FTSE 100 came off a 22-month high to close 48.59 points, or 0.7%, higher at 7,420.69.

European markets failed to catch the upbeat mood with the CAC 40 in Paris closing 0.3% lower, while the DAX 40 in Frankfurt ended down 0.7%.

In London British Airways parent International Consolidated Airlines closed down 2.1% on fears the virus surge will knock travel demand, while Anglo-German tour operator TUI was the worst performer in the FTSE 250, ending down 6.0% Cruise operator Carnival fell 4.7% and budget airline easyJet declined 1.9%.

9am: FTSE hits 22-month high

The FTSE 100 showed an 80-point gain in the first hour to hit 7,451, a rise of 1.1%, putting the index at a 22 month high. It is the first time the index has been above 7450 since 20 February 2020 and comes against a background of rising coronavirus cases but with the omicron variant seeming to be proving milder than first feared. 

8am: Festive surge

Traders defied any expectations of a cautious restart in London, pushing the FTSE 100 up 63.58 points to 7,435.68.

Wall Street was mixed overnight following a rise in Covid-19 cases in the US with the Dow Jones Industrial Average rising 0.26%, while the S&P 500 index dipped 0.10% and the Nasdaq fell 0.56%.

Analysts in the UK believe restrictions in the UK will be more limited, allowing the economy some wriggle room.

Naeem Aslam, chief market analyst at Ava Trade, said: “US and European futures are trading higher as investors continue to favour riskier assets. Having said that, investors are still monitoring the Omicron situation closely which has led to regional and national lockdowns around the globe.

“We are not going to see these restrictions staying in place for an extended period of time. Supply chain issues are already profound and no one wants to see them becoming worse as it will hurt economic growth in the US and rest of the world.”

Among the biggest risers in London were Ladbrokes Coral owner Entain, up 2.82%, Rolls-Royce which was 2.53% higher and JD Sports, up 2.46% following weekend speculation that Mike Ashley’s Frasers will do a deal to acquire Footasylum.

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