After the Omicron version’s emergence, the global stock market stabilised. This followed a severe sell-off the previous week.
The FTSE 100 gained 0.9 percent, or 65.92 Points, to 7109.95. Meanwhile, benchmarks in Europe crawled a little higher.
But the rebound made up only a fraction of the ground lost on Friday when the Footsie tumbled nearly 4 per cent – wiping £72billion off the value of blue chip stocks.
The rebound made up only a fraction of the ground lost on Friday when the Footsie tumbled nearly 4 per cent – wiping £72bn off the value of blue chip stocks.
Investors were on edge with so many misinformation and information swirling about trading desks.
Adam Pollock, head of broking at WH Ireland, said: ‘It’s hard to know what’s true.
‘How contagious is this, can the vaccines fight it, and are the new restrictions necessary?
‘All these questions need to be answered before the market heads in any meaningful direction.
Stock Watch – AG Barr
Due to strong sales momentum, AG Barr, Irn Bru Maker AG Barr, will surpass profit forecasts.
Scottish firm says sales rose above expectations in September.
As people go back to their offices, they are more familiar with the normal ways of life. This has helped the drinks business.
Revenues are expected to be around £264million for the year, with a forecast pre-tax profit of around £41million, assuming there are no big changes to market conditions.
Shares rose 13 Percent, or 61p from 61 to 529p.
‘Today’s recovery is a start but it’s important to remember the market fell nearly 4pc on Friday so we’re not even half way there.’
Pollock reminded us that the stock market is all about future earnings and not current profits. Traders are currently betting against any further lockdowns.
The airlines moved higher as Easyjet added 0.6% or 2.8p to 502.6p. WizzAir climbed 5.5% or 204p at 3933p. British Airways-owner IAG enjoyed early gains and closed at 131p with a loss of 0.3% or 0.4p.
Other stocks related to travel such as Carnival cruise operator (up 2.8percent, 33.6p at 1216.4p), WH Smith (72.5p at 1383.5p), and WH Smith (5.5% at 1383.5p each) drove the FTSE 250 higher by 1% or 218.44points, to 22756.33.
In the top flight of oil, the giants in the industry were a force for good. BP climbed 3.2 percentage points, or 10.05p per share, to 327.7p per barrel, while Shell jumped 2.4 percent (or 37.6p per cup) to 1594p.
Brent crude oil rose by 4 percent to $74 per barrel. This is a marked improvement on Friday’s drop of more than 10%.
JP Morgan analysts expect that prices will rise.
According to the Wall Street Bank, Brent will be $125 per barrel by 2022 and $150 in the following year due to shortage of capacity.
The Omicron variant will pose a threat to global demand, and the US has recently released oil reserves. This week’s Opec meeting is a crucial one.
While the oil market recovered, banks experienced mixed results as they debated when rates could rise.
The emergence of the variant has clouded the outlook for the Bank of England’s December 16 interest rate decision, and economists believe a hike may now be delayed until next year.
Traders and analysts had been confident of a 15 basis point rate hike to 0.25 per cent with pressure on the bank to get a grip on soaring inflation, which hit a decade high in October.
Laith Khalaf, head of investment analysis at AJ Bell, said Omicron had ‘punctured expectations of a Christmas rate hike’, with markets now expecting the rise will occur in February instead.
His words echo those of Bank of England chief economist Huw Pill who last week said that the latest strain of Covid-19 and any reintroduction of government restrictions as a result ‘clearly would change our view of the world’.
He described the emergence of Omicron as ‘a punch in the face.’ Banks tend to perform better when interest rates are rising and as a result only managed minor gains.
Lloyds rose 1.8 percent, or 0.8p to 46.8p. Natwest saw a gain of 1.1percent, or 2.2p to 210.4p. HSBC gained 0.6%, or 2.4p to 416.45p.
After Friday’s strong performance, one sector was in serious trouble: trading platforms.
Amateur traders have increased in the Covid Lockdowns, mostly from young men who are able to afford time and money for stock market betting.
Hargreaves-Lansdown was down 5.6 percentage points, or 80p to 1341.5p. Yesterday, AJ Bell fell 0.1 percent or 0.4p to 396.8p.