London close: FTSE rallies as Omicron concerns ease
London stocks ended sharply higher on Wednesday as worries about the Omicron Covid variant eased.
The FTSE 100 closed up 1.6% at 7,168.68.
AJ Bell financial analyst Danni Hewson said: "The volatility that’s marked the last few days hasn’t gone away but today’s action has at least been positive pretty much across the board. Investors have likely grabbed onto the comments from a WHO official that Omicron is in most cases mild and that there’s no evidence that vaccine efficacy should be reduced.
"If this twist in the Covid saga follows the same path as Delta did then global recovery shouldn’t be undermined. London’s indices have bubbled over with optimism rather like an over eager sommelier with a good champagne. Across all sectors there’s been positive momentum and notable gains for companies that bore the brunt of Friday’s battering with IAG, Wizz Air and The Restaurant Group most in fashion."
Investors were also mulling over the latest data from Nationwide, which showed that UK house price growth edged back into double digits in November. Annual house price growth ticked up to 10% from 9.9% in October, with the average price of a house now at £252,687, almost 15% higher than in March last year when the pandemic struck.
Robert Gardner, Nationwide's chief economist, said: "There have been some signs of cooling in housing market activity in recent months. For example, the number of housing transactions were down almost 30% year-on-year in October. But this was almost inevitable, given the expiry of the Stamp Duty holiday at the end of September, which gave buyers a strong incentive to bring forward their purchase to avoid additional tax.
"Indeed, activity has been extremely buoyant in 2021. The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck."
A separate survey showed that manufacturing input prices hit a 30-year high in November amid supply chain issues.
The IHS Markit/CIPS manufacturing purchasing managers; index rose to three-month high of 58.1 from 57.8 in October, but was below the flash estimate of 58.2. A reading above 50.0 signals expansion, while a reading below indicates contraction.
The survey also found that "severely stretched" supply chains disrupted production schedules and drove up input prices to the greatest extent in the 30-year survey history.
In equity markets, BT Group was the top performer on the FTSE 100 amid ongoing bid speculation, while oil giants BP and Shell gushed higher as oil prices bounced back.
Elsewhere, travel and hospitality stocks recovered, with British Airways and Iberia parent IAG, Premier Inn owner Whitbread, budget airlines Wizz Air and easyJet and Wagamama owner Restaurant Group all higher.
Drax advanced after the biomass energy provider said it expects annual core earnings to be at the top end of current forecasts driven by increased power generation.
Liontrust Asset Management was sitting pretty at the top of the FTSE 250 after it posted a 93% increase in first-half adjusted pre-tax profit to £43.1m.
Vehicle rental company Redde Northgate surged as it reported a jump in interim profit and revenue, hailing a strong performance across the group.
On the downside, online supermarket Ocado - which has benefited from lockdowns and restrictions - was the biggest loser on the top-flight index.
FTSE 100 - Risers
BT Group (BT.A) 166.30p 4.85%
Intermediate Capital Group (ICP) 2,180.00p 4.31%
Mondi (MNDI) 1,791.50p 4.19%
London Stock Exchange Group (LSEG) 6,752.00p 3.84%
Darktrace (DARK) 477.00p 3.70%
ITV (ITV) 113.95p 3.64%
Glencore (GLEN) 369.80p 3.56%
3i Group (III) 1,435.00p 3.46%
Berkeley Group Holdings (The) (BKG) 4,429.00p 3.38%
International Consolidated Airlines Group SA (CDI) (IAG) 131.76p 3.37%
FTSE 100 - Fallers
Ocado Group (OCDO) 1,739.50p -3.12%
Croda International (CRDA) 9,816.00p -2.96%
Pearson (PSON) 582.20p -1.85%
Hargreaves Lansdown (HL.) 1,327.50p -0.71%
Polymetal International (POLY) 1,362.50p -0.69%
Severn Trent (SVT) 2,872.00p -0.49%
Johnson Matthey (JMAT) 2,091.00p -0.24%
Avast (AVST) 605.00p -0.13%
Unilever (ULVR) 3,854.50p -0.12%
Bunzl (BNZL) 2,866.00p -0.07%
FTSE 250 - Risers
Liontrust Asset Management (LIO) 2,300.00p 12.47%
Redde Northgate (REDD) 442.50p 12.03%
Drax Group (DRX) 601.00p 9.27%
Restaurant Group (RTN) 85.80p 7.65%
Wizz Air Holdings (WIZZ) 4,223.00p 7.02%
Spire Healthcare Group (SPI) 245.50p 6.05%
Trustpilot Group (TRST) 301.60p 5.38%
Countryside Properties (CSP) 435.20p 5.38%
Molten Ventures (GROW) 973.00p 5.19%
TI Fluid Systems (TIFS) 230.50p 4.77%
FTSE 250 - Fallers
Endeavour Mining (EDV) 1,730.00p -2.54%
Indivior (INDV) 224.60p -2.26%
Pennon Group (PNN) 1,199.00p -2.12%
Centamin (DI) (CEY) 95.02p -2.10%
Currys (CURY) 128.60p -1.53%
Hochschild Mining (HOC) 129.90p -1.44%
Future (FUTR) 3,546.00p -1.06%
Syncona Limited NPV (SYNC) 212.00p -0.93%
Chrysalis Investments Limited NPV (CHRY) 236.00p -0.84%
Shaftesbury (SHB) 612.50p -0.41%