London midday: Stocks extend gains as Omicron worries recede
By Michele Maatouk
Date: Tuesday 07 Dec 2021
(Sharecast News) - London stocks had extended gains by midday on Tuesday as worries about the Omicron variant receded, underpinned by a strong showing in the mining sector.
The FTSE 100 was up 1.2% at 7,319.79 .
IG market analyst Joshua Mahony said: "European markets are showing a consistently positive outlook this week as fears over Omicron start to dissipate. Reopening stocks have enjoyed a welcome bounce this week, as investors pre-empt a positive outlook when the South African data is crunched. Despite a surge in Covid cases and hospital admissions, the mild symptoms are expected to keep deaths well below the levels seen in prior waves.
"Chinese exports reached a record high in November, with early festive sales driving up demand given concerns over global supply chain friction. With the pandemic driving up household savings, we are likely to see further growth in demand for December, although for UK businesses it is more a question of whether they can take advantage of that surge. Crucially we have also seen Chinese imports sharply higher in November, allaying fears around how global logistical struggles could hinder growth from some of the major commodity exporting nations."
On home shores, market participants were digesting the latest survey from Halifax, which showed that house price growth has hit a 15-year high, fuelled by strong demand and a shortage of properties.
The Halifax house price index showed that the value of an average property increased 1% in November, or by £2,808, to £272,992. Consensus had been for an increase of 0.6%. November is now the fifth consecutive month that house prices have risen.
The annual rate of inflation is now 8.2%, while on a rolling quarterly basis, the uptick was 3.4%, the strongest gain since the end of 2006.
The UK housing market was shuttered during the first pandemic but since then has boomed, boosted by record low interest rates, a surge in demand for different property types, a shortage of properties coming to market, and the stamp duty holiday. Halifax said that since March 2020, house prices have risen by £33,816 or £1,691 per month.
Some analysts had expected inflation to ease after stamp duty reverted to its traditional threshold at the end of September.
But Russell Galley, managing director at Halifax, said: "The market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition among mortgage providers keeping rates close to historic lows.
"Those taking their fest step onto the property ladder are also playing an important role in driving activity, with annual house price inflation for first-time buyers at 9.1% compared to 8.8% for home movers."
Looking ahead, however, and Galley conceded that the pace of growth was unlikely to continue next year.
"There is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation," he said. "Economic confidence may be also dented by the emergence of the new Omicron variant, though it remains far too early to speculate on any long-term impact."
In equity markets, miners were among the top performers as copper prices rose, with Anglo American, Rio Tinto and Glencore all up.
Ferguson racked up healthy gains after saying its expectations for annual results had increased as the plumbing and heating distributor reported a surge in first-quarter profit.
Aveva was a high riser after an initiation at 'outperform' by Bernstein.
Equipment rental firm Ashtead rallied after it upgraded its expectations for the full year as it reported a record first-half performance, hailing momentum across the business.
PageGroup gained after saying it now expects full-year operating profit of around £165m, up from previous guidance of £155m.
Defence engineering firm Babcock rose as it reported an increase in underlying interim profit, but expressed caution over the Omicron coronavirus variant and ongoing inflation and supply chain constraints.
On the downside, AstraZeneca was knocked lower by a downgrade to 'hold' from 'buy' at Jefferies
Market Movers
FTSE 100 (UKX) 7,319.79 1.21%
FTSE 250 (MCX) 23,185.01 1.33%
techMARK (TASX) 4,459.50 1.11%
FTSE 100 - Risers
Anglo American (AAL) 2,967.00p 5.49%
Darktrace (DARK) 435.60p 4.66%
Ferguson (FERG) 12,070.00p 4.32%
Aveva Group (AVV) 3,319.00p 3.75%
Rio Tinto (RIO) 4,764.50p 3.75%
Antofagasta (ANTO) 1,408.50p 3.60%
Flutter Entertainment (CDI) (FLTR) 10,985.00p 3.39%
Scottish Mortgage Inv Trust (SMT) 1,431.50p 3.36%
Ashtead Group (AHT) 6,404.00p 3.32%
Entain (ENT) 1,744.50p 3.22%
FTSE 100 - Fallers
Reckitt Benckiser Group (RKT) 6,133.00p -1.40%
B&M European Value Retail S.A. (DI) (BME) 631.20p -1.38%
AstraZeneca (AZN) 8,254.00p -1.30%
Polymetal International (POLY) 1,321.00p -0.86%
Barclays (BARC) 186.10p -0.51%
Associated British Foods (ABF) 1,961.00p -0.46%
Hikma Pharmaceuticals (HIK) 2,270.00p -0.39%
Hargreaves Lansdown (HL.) 1,303.00p -0.34%
Vodafone Group (VOD) 112.68p -0.18%
Aviva (AV.) 399.20p -0.08%
FTSE 250 - Risers
Network International Holdings (NETW) 290.60p 6.49%
Ferrexpo (FXPO) 304.20p 6.44%
Moonpig Group (MOON) 344.00p 5.52%
Cineworld Group (CINE) 53.00p 5.33%
Trustpilot Group (TRST) 326.00p 5.16%
Dr. Martens (DOCS) 408.00p 4.99%
Future (FUTR) 3,502.00p 4.72%
Synthomer (SYNT) 425.00p 4.53%
Harbour Energy (HBR) 429.20p 4.23%
Renishaw (RSW) 4,658.00p 4.07%
FTSE 250 - Fallers
Baltic Classifieds Group (BCG) 220.00p -2.22%
BH Macro Ltd. GBP Shares (BHMG) 3,730.00p -1.58%
Rank Group (RNK) 141.00p -1.54%
Hammerson (HMSO) 33.30p -1.30%
Victrex plc (VCT) 2,420.00p -1.22%
PureTech Health (PRTC) 278.50p -1.07%
Drax Group (DRX) 578.50p -0.94%
Petropavlovsk (POG) 21.02p -0.57%
Restaurant Group (RTN) 90.30p -0.55%
TBC Bank Group (TBCG) 1,550.00p -0.51%
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