FTSE 100 movers: Travel stocks gain; Dechra hit by downgrade
London’s FTSE 100 was up 1.8% a t7,515.15 in afternoon trade on Tuesday, kicking off the new year in style.
British Airways and Iberia parent IAG and Premier Inn owner Whitbread rallied as investors welcomed signs that Omicron is less severe than previous Covid variants.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that as far as the travel sector is concerned, "there is clearly expectation that bookings will have got a rocket boost from hopes that this latest spike of infection will flatten relatively quickly".
"With so many people in the short-term being forced to isolate at home, it’s likely many people will be spending the next few weeks browsing travel blogs for inspiration, given there is so much desperation for a holiday around."
Events business Informa was also a high riser. Streeter said: "The conference organiser is riding higher amid hopes its lucrative face-to- face events business might soon resume with gusto. Virtual meet ups just haven’t been the cash cow that big conferences provide and it's expected the wind will be put back into the sails of global events once more."
Oil giants BP and Shell advanced as the Organisation of Petroleum Exporting Countries and its main allies went ahead and raised their combined output target as planned. OPEC+ countries' energy ministers said the cartel's production would rise by 400,000 barrels per day in February, as per the strategy they had outlined in mid-2021.
Dechra Pharmaceuticals was under pressure after Exane BNP Paribas initiated coverage of the stock at ‘neutral’ on valuation grounds.
"Dechra is the ninth largest animal heath player. Astute positioning, ongoing earnings per share upgrades and M&A have led the company to materially outpace the market in the last decade," Exane said. "This is likely to continue but a particularly punchy valuation leads us to initiate at neutral despite short-term upside risks."
Online supermarket Ocado - which has benefitted from lockdowns and restrictions - was among the fallers amid optimism over Omicron.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 159.66p 12.06%
BP (BP.) 350.35p 6.01%
Informa (INF) 546.80p 5.85%
Melrose Industries (MRO) 169.00p 5.69%
Royal Dutch Shell 'A' (RDSA) 1,708.00p 5.32%
Royal Dutch Shell 'B' (RDSB) 1,708.60p 5.31%
Whitbread (WTB) 3,149.00p 5.14%
HSBC Holdings (HSBA) 471.60p 5.12%
Barclays (BARC) 196.18p 4.91%
M&G (MNG) 209.00p 4.76%
FTSE 100 - Fallers
Dechra Pharmaceuticals (DPH) 4,938.00p -7.27%
Ocado Group (OCDO) 1,589.00p -5.30%
Fresnillo (FRES) 857.60p -3.94%
Polymetal International (POLY) 1,274.50p -2.82%
SEGRO (SGRO) 1,398.50p -2.65%
Rentokil Initial (RTO) 569.60p -2.47%
Admiral Group (ADM) 3,085.00p -2.28%
AstraZeneca (AZN) 8,483.00p -2.25%
Croda International (CRDA) 9,950.00p -1.68%
Aveva Group (AVV) 3,351.00p -1.56%