London close: Stocks finish higher as Omicron concerns ebb
London stocks gave back some of their earlier gains, but still closed higher on Monday, as stocks staged a recovery from last Friday’s sell-off amid worries about the new ‘Omicron’ variant of Covid-19.
The FTSE 100 ended the session up 0.94% at 7,109.95, and the FTSE 250 was 0.97% firmer at 22,756.33.
Sterling was in a mixed state, meanwhile, last trading 0.28% weaker against the dollar at $1.3299, while it gained 0.19% on the euro to change hands at €1.1804.
“UK investors have spent the day picking up some relative bargains in global economy names like Compass, BP and BHP Group, as the risk aversion of Friday ebbs away,” said IG chief market analyst Chris Beauchamp.
“A less severe viral variant implies a more modest reaction from governments this time around, with a smaller hit to GDP than that seen last year.
“Some of Friday’s more extreme movements are thus being unwound today, although a hint of caution persists.”
On the economic front, UK retail footfall rose 2% week-on-week in the seven days ended 27 November, although that was driven by shopping centres and retail parks as footfall across high street destinations declined on Black Friday for the first time ever.
Footfall at shopping centres increased 6.5% week-on-week and retail park footfall grew 4.9%, while footfall in high streets declined by 1.5%, according to retail experts Springboard.
Footfall was shown to have strengthened significantly on Black Friday, increasing from the week before by 17.9% in shopping centres and by 11.4% in retail parks but on High Streets, footfall declined week-on-week by -0.5%, the first drop since Black Friday started in the UK.
Lending to individuals, meanwhile, edged higher in October, even as mortgage borrowing hit a three-month low.
According to the Bank of England, total lending to individuals increased by 0.1% month-on-month or £2.3bn to reach £1.75trn, for a 4.4% rise year-on-year.
Within that, consumer credit increased by a net £0.7bn last month, against consensus expectations for a £0.5bn rise, to reach £196.4bn, or by 0.4% on the month.
That came even as the effective rate on new personal loans hit 6.27% - its highest since March 2020, although it remained beneath its January 2020 level.
Credit card debt accounted for the bulk of the increase, jumping by 1.1% or £600m versus September.
In energy news, analysts at JP Morgan predicted that underinvestment in new oil production capacity was set to drive Brent crude oil prices to $125 per barrel in 2022, and $150 in 2023.
They arrived at that conclusion after constructing a bottom-up field-by-field model which yielded an eventual 3.0m barrel per day shortfall in capacity versus OPEC+'s stated goal of 49.1m b/d in the front half of 2024.
"OPEC+ is back in the oil market driver's seat and the Prisoner's Dilemma is over, as we predicted in Supercycle II," they said.
"However, the group's ability to control price - the steering wheel - depends on the efficacy of its spare capacity, which, at prevailing quotas, is set to fall to a 25-yr low of just 4% of total from an average of 14% [for] 1995 to 2020, and well below the 10% comfort level sought by consumers.”
In equity markets, travel and hospitality shares were on the rise after falling heavily on Friday, with Premier Inn owner Whitbread rising 1.34%, cruise operator Carnival adding 2.94%, and newsagent WH Smith gaining 5.53%.
Eastern Europe-focussed airline Wizz Air ascended 5.47%, tour operator TUI rose 0.96%, Cineworld Group gained 1.75%, and the Restaurant Group was 5.03% higher.
BT Group jumped 6.1%, rising even after India’s Reliance Industries refuted a report that it was considering buying the London-listed telecoms group.
The Economic Times reported that billionaire Mukesh Ambani's Reliance might make an unsolicited offer or try to get a controlling stake in the company.
However, Reliance said earlier in the session that it did not intend to bid for BT.
Johnson Matthey rallied 3.24% on a report that India’s Tata Chemicals was interested in buying the company’s batteries business.
According to the Mint newspaper, the batteries business could fetch between $500m and $700m.
Hammerson pushed 1.48% higher after the property company confirmed it is in discussions over the possible disposal of Silverburn, its flagship destination near Glasgow, which is held in a 50/50 joint venture with CPPIB.
It also confirmed the pricing under discussion was £140m and added "there can be no certainty that a transaction will take place".
Venture capital tech specialist Molten Ventures added 4.69% after it reported a rise in net asset value for the six months ended 30 September, on the back of a sharp rise in cash investments.
On the downside, online electricals retailer AO World lost 4.64%, having gained on Friday on the back of concerns of a fresh lockdown.
AO World was one of the big winners in previous lockdowns, being among the only contact-free options for consumers with broken white goods.
FTSE 100 - Risers
BT Group (BT.A) 163.55p 6.10%
Compass Group (CPG) 1,522.00p 4.71%
JD Sports Fashion (JD.) 1,140.00p 3.58%
Johnson Matthey (JMAT) 2,133.00p 3.24%
BP (BP.) 327.70p 3.16%
BHP Group (BHP) 2,019.00p 2.91%
Royal Dutch Shell 'A' (RDSA) 1,594.80p 2.48%
Royal Dutch Shell 'B' (RDSB) 1,594.00p 2.42%
ITV (ITV) 111.20p 2.39%
Aviva (AV.) 378.20p 1.97%
FTSE 100 - Fallers
Hargreaves Lansdown (HL.) 1,341.50p -5.63%
Polymetal International (POLY) 1,341.50p -2.26%
Hikma Pharmaceuticals (HIK) 2,230.00p -2.11%
Darktrace (DARK) 462.00p -1.91%
Sainsbury (J) (SBRY) 289.70p -1.33%
Royal Mail (RMG) 500.20p -1.07%
Abrdn (ABDN) 235.80p -0.97%
CRH (CDI) (CRH) 3,679.00p -0.81%
Unilever (ULVR) 3,921.00p -0.77%
Prudential (PRU) 1,295.50p -0.69%
FTSE 250 - Risers
WH Smith (SMWH) 1,384.00p 5.53%
Wizz Air Holdings (WIZZ) 3,933.00p 5.47%
Restaurant Group (RTN) 81.50p 5.03%
Ferrexpo (FXPO) 285.00p 4.78%
Aston Martin Lagonda Global Holdings (AML) 1,506.50p 4.76%
Molten Ventures (GROW) 916.00p 4.69%
Airtel Africa (AAF) 126.40p 4.53%
Investec (INVP) 369.20p 4.41%
Energean (ENOG) 898.50p 3.81%
Man Group (EMG) 227.50p 3.74%
FTSE 250 - Fallers
AO World (AO.) 104.90p -4.64%
FirstGroup (FGP) 98.45p -4.32%
Micro Focus International (MCRO) 376.40p -3.21%
XP Power Ltd. (DI) (XPP) 4,895.00p -2.91%
Pets at Home Group (PETS) 465.40p -2.68%
Grainger (GRI) 302.40p -2.51%
PureTech Health (PRTC) 306.00p -2.26%
TP Icap Group (TCAP) 128.94p -2.07%
Reach (RCH) 261.00p -1.88%
Assura (AGR) 68.35p -1.58%