London markets whipsaw on Omicron curbs uncertainty
A whipsawing in the likelihood of fresh restrictions to curb the spread of Omicron being imposed in England is generating wild swings on London markets.
The capital’s premier FTSE 100 index closed 1.38 per cent higher today to reach 7,297.41 points, while the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, added 1.20 per cent to finish at 22,820.30 points.
Yesterday, the indexes closed down 0.99 per cent and 1.01 per cent respectively.
Investors were spooked yesterday by reports indicating Prime Minister Boris Johnson was set to launch new restrictions to quash Omicron infections before Christmas.
However, emerging from an over two-hour cabinet meeting, Johnson confirmed no new measures would be implemented, but warned the UK government would act swiftly if needed.
Today, Johnson confirmed no fresh curbs would be imposed before Christmas, but, again, hinted measures could be needed if the Omicron situation does not improve.
Russ Mould, investment director at AJ Bell, said: “As we head towards an uncertain festive break the market is swaying about more than someone who’s over-indulged on the sherries on Christmas Day.”
“That’s unsurprising as investors still awaiting a full picture on just how disruptive Omicron is going to be – with UK Prime Minister Boris Johnson putting off any decision on further restrictions for now.”
Commodity giants led the FTSE 100 higher today, boosted by oil prices paring back some of yesterday’s losses.
Oil giants BP and Royal Dutch Shell 2.64 per cent and 2.86 per cent. Miners Rio Tinto and Evraz both rose more than three per cent.
Travel stocks were also among the best performers on the FTSE 100 today, with British Airways owner IAG topping the index.
Meanwhile, on the mid-cap FTSE 250, travel agent and airline Tui was the second best performer, closing 6.63 per cent higher.
Middle class favourite and online supermarket Ocado was the FTSE 100’s worst performer, sliding 2.71 per cent as investors poured out of the stock after Johnson confirmed no new Covid prevention measures would be imposed before Christmas.
Ocado benefits from tighter virus curbs as they tend to steer consumers away from physical supermarkets and toward shopping online.
The pound gained ground on the greenback, strengthening 0.31 per cent to $1.3248.
London’s strong performance bled into the continent. The pan-European Stoxx 600 and Germany’s Dax 30 climbed 1.39 per cent and 1.36 per cent respectively.
Wall Street flew out of the gates, with the Dow Jones, S&P 500 and Nasdaq are rising more than one per cent during opening exchanges.