London close: FTSE recovers from Omicron slump as concerns wane

By Josh White

Date: Tuesday 07 Dec 2021

London close: FTSE recovers from Omicron slump as concerns wane

(Sharecast News) - London stocks closed in positive territory midday on Tuesday as worries about the Omicron variant receded, underpinned by a strong showing in the mining sector.
The FTSE 100 ended the session up 1.49% at 7,339.90, and the FTSE 250 was ahead 1.56% at 23,238.17.

Sterling was in a mixed state, meanwhile, last trading 0.23% weaker against the dollar at $1.3233, while it strengthened 0.1% on the euro to change hands at €1.1765.

"In London the FTSE 100 has found itself back on course for the highs of the year, recovering all the gains lost in the post-Thanksgiving Omicron slump," said IG chief market analyst Chris Beauchamp.

"UK investors will be hoping this markets a continuation of the 2021 rally, after a tough summer that saw the index struggle for momentum.

"Bounces in materials and energy have underpinned the gains, and point towards renewed strength for the 'global reopening' trade."

On the economic front, industry data released earlier showed UK retail sales jumping last month, as consumers sought out Black Friday deals and got a head start on Christmas shopping.

According to the BRC-KPMG Retail Sales Monitor, total sales strengthened 5.0% last month, compared to growth of 0.9% a year previously.

On a like-for-like basis, sales rose 1.8% year-on-year, above the three-month average of 0.2% but below the 12-month average of 9.3%.

"While Christmas may or may not be getting earlier every year, Black Friday certainly is," said Helen Dickinson, chief executive of the British Retail Consortium.

"The American [event] has now become a month-long affair in the UK, with deals spread over a longer period than ever before.

"As people prepared their wardrobes for the cold weather, consumers took advantage of discounted clothing, shifting the focus from just electronics and household appliances."

Food inflation pushed higher last month, however, with Christmas staples already costing more.

According to research from retail consultancy Kantar, grocery prices rose 3.2% in the four weeks to 28 November, the highest rate of inflation since June 2020.

For the 12 weeks to November end, grocery inflation stood at 2.2%.

Driving the increase were savoury snacks, crisps and cat food, while prices fell in fresh bacon, bath and shower products, and pet treats.

"Consumer behaviour hasn't caught up with these changes," said Fraser McKevitt, head of retail and consumer insight.

"Habits we'd expect to see shift, like swapping branded products for own label, or seeking out promotions, haven't altered just yet."

UK house price growth, meanwhile, hit a 15-year high according to industry research, fuelled by strong demand and a shortage of properties.

According to the latest Halifax house price index, 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%, with November now the fifth consecutive month that house prices had risen.

Some analysts had expected inflation to ease after stamp duty reverted to its traditional threshold at the end of September.

"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," said Russell Galley, managing director at Halifax.

"Those taking their first 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."

In equity markets, miners were among the top performers as copper prices rose, with Anglo American up 6.49%, Rio Tinto adding 4.8%, and Glencore ahead 3.12%.

Ferguson racked up gains of 5.92% 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, advancing 5.38% after an initiation at 'outperform' by Bernstein.

Equipment rental firm Ashtead Group rallied 3.94% after it upgraded its expectations for the full year as it reported a record first-half performance, hailing momentum across the business.

PageGroup gained 3.83% after saying it now expected full-year operating profit of around £165m, up from previous guidance of £155m.

Informa was up 3.59% after it announced a special dividend and a plan to sell its data and research business, Informa Intelligence.

Online greeting card retailer Moonpig jumped 9.26% ahead of half-year results later in the week.

On the downside, defence engineering firm Babcock International reversed earlier gains to close down 0.98%, after it reported an increase in underlying interim profit, but expressed caution over the Omicron coronavirus variant and ongoing inflation and supply chain constraints.

AstraZeneca was knocked 1.67% lower by a downgrade to 'hold' from 'buy' at Jefferies, while Barclays slipped 0.18% after a downgrade to 'hold' from 'buy' at Deutsche Bank.

Victrex slipped 0.98% by the end of trading, having gained on Monday after it posted a rise in full-year profit and revenue and hiked its dividend.

Market Movers

FTSE 100 (UKX) 7,339.90 1.49%
FTSE 250 (MCX) 23,238.17 1.56%
techMARK (TASX) 4,470.45 1.35%

FTSE 100 - Risers

Anglo American (AAL) 2,995.00p 6.49%
Ferguson (FERG) 12,255.00p 5.92%
BHP Group (BHP) 2,173.50p 5.59%
Aveva Group (AVV) 3,371.00p 5.38%
Rio Tinto (RIO) 4,813.00p 4.80%
Evraz (EVR) 616.80p 4.58%
3i Group (III) 1,464.00p 4.57%
Antofagasta (ANTO) 1,418.50p 4.34%
Ashtead Group (AHT) 6,442.00p 3.94%
Flutter Entertainment (CDI) (FLTR) 11,040.00p 3.91%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 627.60p -1.94%
AstraZeneca (AZN) 8,223.00p -1.67%
Pearson (PSON) 594.00p -1.16%
Reckitt Benckiser Group (RKT) 6,152.00p -1.09%
Vodafone Group (VOD) 111.88p -0.89%
Aviva (AV.) 396.30p -0.80%
Whitbread (WTB) 2,953.00p -0.77%
Polymetal International (POLY) 1,322.50p -0.75%
Hikma Pharmaceuticals (HIK) 2,266.00p -0.57%
Sainsbury (J) (SBRY) 278.70p -0.46%

FTSE 250 - Risers

Moonpig Group (MOON) 356.00p 9.20%
Network International Holdings (NETW) 295.00p 8.10%
Trustpilot Group (TRST) 334.20p 7.81%
Ferrexpo (FXPO) 306.20p 7.14%
Reach (RCH) 265.00p 6.85%
Future (FUTR) 3,558.00p 6.40%
Kainos Group (KNOS) 1,869.00p 5.77%
Volution Group (FAN) 524.00p 5.75%
Synthomer (SYNT) 429.80p 5.71%
Dr. Martens (DOCS) 410.00p 5.51%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 219.00p -2.67%
Domino's Pizza Group (DOM) 361.60p -1.90%
BH Macro Ltd. GBP Shares (BHMG) 3,720.00p -1.85%
Rank Group (RNK) 141.00p -1.54%
SSP Group (SSPG) 231.60p -1.53%
Syncona Limited NPV (SYNC) 214.00p -1.38%
Victrex plc (VCT) 2,420.00p -1.22%
Hammerson (HMSO) 33.36p -1.13%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 494.50p -1.10%
Babcock International Group (BAB) 303.80p -0.98%


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