London midday: FTSE extends gains as travel shares rally
London stocks kicked off the new year in style on Tuesday, with travel shares pacing the gains as investors welcomed signs that Omicron is less severe than previous Covid variants.
At midday, the FTSE 100 was up 1.3% at 7,483.69, having taken its cue from a positive session on Wall Street, which saw the Dow and the S&P hit record highs.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "With yet more indications that Omicron, though highly infectious, does not cause such serious illness, a wave of relief is pushing up companies which have been hit by worries about tighter restrictions."
As far as the travel sector is concerned, she said "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."
Travel-related stocks were the standout gainers, with BA and Iberia owner IAG the top riser on the FTSE 100. Engine maker Rolls-Royce, Premier Inn owner Whitbread, InterContinental Hotels, Carnival, easyJet, Wizz, Tui and SSP were all sharply higher.
The sector also got a boost after Wizz Air said December capacity soared by almost 200% year on year, reflecting eased Covid-19 restrictions.
Events business Informa racked up healthy gains, along with GKN owner Melrose.
On the downside, Dechra Pharmaceuticals was under the cosh after an initiation at ‘neutral’ by Exane BNP Paribas, which highlighted a "particularly punchy valuation" despite short-term upside risks.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 160.10p 12.37%
Informa (INF) 542.60p 5.03%
M&G (MNG) 208.90p 4.71%
Melrose Industries (MRO) 167.40p 4.69%
BP (BP.) 345.60p 4.57%
Royal Dutch Shell 'B' (RDSB) 1,686.20p 3.93%
Royal Dutch Shell 'A' (RDSA) 1,685.00p 3.90%
HSBC Holdings (HSBA) 465.70p 3.80%
Rolls-Royce Holdings (RR.) 127.54p 3.79%
Whitbread (WTB) 3,107.00p 3.74%
FTSE 100 - Fallers
Dechra Pharmaceuticals (DPH) 5,035.00p -5.45%
Ocado Group (OCDO) 1,601.00p -4.59%
Fresnillo (FRES) 858.40p -3.85%
AstraZeneca (AZN) 8,498.00p -2.07%
Polymetal International (POLY) 1,289.00p -1.72%
Croda International (CRDA) 9,976.00p -1.42%
Admiral Group (ADM) 3,113.00p -1.39%
Rentokil Initial (RTO) 577.00p -1.20%
Rio Tinto (RIO) 4,840.50p -1.05%
SEGRO (SGRO) 1,422.50p -0.97%
FTSE 250 - Risers
Wizz Air Holdings (WIZZ) 4,712.00p 12.51%
easyJet (EZJ) 622.80p 12.01%
TUI AG Reg Shs (DI) (TUI) 256.50p 10.85%
Watches of Switzerland Group (WOSG) 1,556.00p 9.58%
Carnival (CCL) 1,486.60p 7.44%
SSP Group (SSPG) 255.20p 6.29%
WH Smith (SMWH) 1,572.50p 6.25%
Discoverie Group (DSCV) 1,084.00p 5.65%
Hammerson (HMSO) 34.58p 5.43%
Energean (ENOG) 899.50p 5.20%
FTSE 250 - Fallers
Baltic Classifieds Group (BCG) 242.00p -4.35%
Indivior (INDV) 248.00p -3.50%
Darktrace (DARK) 406.00p -3.38%
Reach (RCH) 273.00p -3.36%
Softcat (SCT) 1,766.00p -2.11%
Kainos Group (KNOS) 1,880.00p -1.93%
Essentra (ESNT) 338.50p -1.88%
Endeavour Mining (EDV) 1,640.00p -1.80%
Fidelity China Special Situations (FCSS) 306.00p -1.61%
Auction Technology Group (ATG) 1,494.00p -1.45%