- FTSE 100 adds 49 points to close at 7,421
- Index earlier had hit its highest level since Feb 2020
- US stocks open higher
16.50: FTSE 100 loses steam at the close but finishes in the green
The UK's blue-chip index managed to close in the green on a day that flirted with new highs.
The FTSE 100 closed at 7,421 points for a 0.66% gain on the day.
Commenting on the day's trading, analyst Joshua Mahoney at IG said: "A largely mixed affair for US and European stocks today with the recent festive push helping to drive the FTSE 100 up into a 22-month high. Underperformance for the Nasdaq highlights increased risks for growth stocks, as surging inflation brings a pathway for higher interest rates globally."
Mahoney added: "The desire to pay lofty prices for unprofitable stocks does tend to wane when central banks start to tighten the screw, with many likely to focus more on pro-cyclical and value stocks as a result."
15.35: FTSE 100 heading for the close in decent shape
FTSE 100 has lost some of its earlier exuberance but is still heading for the close in pretty decent shape.
With an hour to go the index was up 48 at 7,420, though volumes looked light as would be expected in this traditionally quiet in-between holiday period.
Among the small caps, there were several standout movers nonetheless, though only United Oil & Gas and Cadence seemingly had tangible reasons for their share price jumps.
United Oil said its latest well on the onshore Abu Sennan licence in Egypt, Al Jahraa-13, came in ahead of schedule and under budget and encountered 17.5m of net pay.
The well will be tested and completed in the coming days, the company said, before being brought immediately onstream through the existing Al Jahraa facilities.
Brian Larkin, chief executive, added: “We have had outstanding results with our drilling campaign in 2021 with five out of five successful wells drilled at Abu Sennan this year. All of the wells have been brought into production quickly, generating cash flow for the company.”
Shares rose 24% to 2.8p.
Cadence Minerals did even better as it said it had cleared the way for its joint venture with Indo Sino to acquire 100% ownership of the Amapa iron ore project.
Shares jumped 36% to 26.5p.
14.59: US stocks edge higher
US stocks opened modestly in positive territory as investors parsed the latest headlines on the Omicron variant amid thin trading in the final days of the year.
The S&P 500 was relatively flat, opening 0.2% higher, while the Dow Jones Industrial Average ticked up 40.56 points, or 0.1% higher. The tech-dominated Nasdaq Composite which took a beating on Tuesday climbed 0.1% to 15,807.02 at the open.
Markets were highly volatile in December as investors reacted to every bit of news that could guide expectations over how the Omicron variant may play out.
“There’s an element of positivity. The data continues to suggest that the disease itself caused by Omicron is materially less severe than the variants which have preceded it,” said James Athey, an investment manager at Abrdn told The Wall Street Journal. “That’s always been the endgame for the pandemic.”
14.11: Footsie still well ahead
FTSE100 was hanging on to most of its early gains heading into the afternoon session, with the index up around 53 points at 7,424.
Hospitality stocks made modest advances even though the statistics for the week before Christmas made for sober reading.
Trade body UKHospitality estimates sales were down by around 60% compared to the same 2019 period before Covid.
Worries about omicron and the warnings from the government to work from home were blamed, with lost income amounting to £10,335 on average per outlet over the week.
UKHospitality added that trading had been around the 2019 level before the outbreak of omicron but had collapsed as fears grew about the new strain of the virus.
Kate Nicholls, UKH’s chief executive, said the grim numbers underlined the need for more financial support for the sector and that any further restraints on trading for pubs and restaurants must be avoided
Shares in pubs groups Mitchells & Butlers rose by 0.8% to 248.6p and JD Wetherspoon 1.2% to 941p.
Best of the Footsie rises was engineer Spirax-Sarco, up 3.7% at 585p, while Fresnillo led the fallers with a 1.8% dip to 877p.
12:42PM: US stocks to open higher
US stocks are once again forecast to open modestly higher, looking to finish 2021 positively as investors focus ahead to the new year.
Futures for the Dow Jones Industrial Average futures rose 0.1%, while those for the S&P 500 also added 0.1%, and contracts for the Nasdaq-100 futures gained 0.2% on Wednesday.
US stocks ended mixed on Tuesday, with the Dow gaining 0.3%, but the S&P 500 losing 0.1% and the Nasdaq Composite dropping 0.5%, albeit with trading volumes at the lowest level seen all year.
Investors seem to be becoming increasingly comfortable with the theory that the Omicron coronavirus (COVID-19) variant may not lead to harsh restrictions on commerce and movement as more information emerges, with many expecting a continued economic recovery.
Looking at the economy, the National Association of Realtors will release US pending home sales data for November at 10.00am ET, with economists expecting a slowdown from the previous month.
On the corporate front, Tesla Inc (NASDAQ:TSLA) (Tesla Inc (NASDAQ:TSLA)) shares rose in pre-market trading as its chief executive Elon Musk exercised the final batch of a package of vested stock options, a series of transactions that have boosted his stake in the company.
But shares in egg producer Cal-Maine Foods (NASDAQ:CALM) (Cal-Maine Foods (NASDAQ:CALM)) cracked in after-hours trading on Tuesday after the company reported a decline in profits, citing higher costs.
Elsewhere, Bitcoin stabilized after its biggest drop in nearly a month, rising 0.5% to around $47,800 after sliding as low as $47,318.93 the previous day.
11.46am: Index at 22-month high
Stock markets are mixed across Europe this morning, with the FTSE 100 up 65 points or 0.9% to 7,437.53, and the main US indices are tipped to open modestly higher when they open in a few hours.
Futures for the Dow Jones Industrial Average and S&P 500 are pointing to a 0.1% rise, while contracts for the Nasdaq-100 futures are up 0.2%. This follows a mixed session where trading volumes were at the lowest level seen all year.
Investors seem to be becoming increasingly comfortable with the theory that the Omicron coronavirus (COVID-19) variant may not lead to harsh restrictions on commerce and movement as more information emerges (see below).
US home sales data for November is expected shortly, with economists expecting a slowdown from the previous month.
On the corporate front, Tesla Inc (NASDAQ:TSLA) shares are up in pre-market trading as its chief executive Elon Musk exercised the final batch of a package of vested stock options, a series of transactions that have boosted his stake in the company.
Musk is also in the news for stoking tensions with China, which has made an official complaint about his SpaceX company's satellites after they almost collided with the Tiangong space station.
But shares in egg producer Cal-Maine Foods (NASDAQ:CALM) cracked in after-hours trading on Tuesday after the company reported a decline in profits, citing higher costs.
Crypto report: Bitcoin and Ethereum lose Xmas cheer but Cardano rallies
Elsewhere, Bitcoin was stabilising after its biggest drop in nearly a month, rebounding 0.5% to around $47,800 after sliding as low as $47,318.93 overnight.
"I can’t see any news behind the move, and I suspect year-end book squaring into thin market conditions exaggerated the range," said market analyst Jeffrey Halley at Oanda.
"There is nothing to suggest that Bitcoin’s recent $45,000 to $52,000 [range] is under threat. Only a daily close above or below those levels’ hints that a new directional move is in play.
"Although I consider the crypto space as a whole to be a giant case of the Emperor’s New Clothes, and the home moronic speculative banality, I do acknowledge it is a tradeable if not investable, 'asset class', and perhaps more fun than the casino. In that respect, only a weekly close below $40,000.00 will have me concerned that another major downside correction is in play."
10.40am: Few fallers
There's not much meat on the bone for the few investors about today in terms of company news, as we drift in the interregnum between Christmas and New Year.
There was a handful of blue-chip announcements, however, including Fresnillo PLC (LSE:FRES) blaming a further delay to its new precious metals mine in Mexico on Covid-related staff shortages at the national power company.
The miner is one of only six FTSE 100 fallers, down 0.8% - but not bottom of the pile. That dishonour, not unsurprisingly due to its volatility over the past two years, to British Airways owner IAG PLC (International Consolidated Airlines Group (LSE:IAG)).
This also comes with around 11,500 flights having been scrapped worldwide since Friday, with many airlines blaming staff shortages caused by spikes of Omicron cases.
Another of the tumblers is Scottish Mortgage Investment Trust PLC (LSE:SMT), the tech-laden investment trust that often drops in synch with New York's Nasdaq.
The Footsie is up 76 points or just over 1% at 7,448.52, while the mid caps of the FTSE 250 are up nearly 300 points or 1.27% at 23,566.66 and pushing towards the all-time highs above 24,000 seen in September.
9.05am: FTSE makes strong start
The FTSE 100 has defied predictions and started strongly, with a 80-point gain in the first hour to 7,451, a rise of 1.1% to put the index at a new 22 month high.
This is the first time the index has been above 7450 since 20 February 2020.
It comes against a background of rising coronavirus cases but with the omicron variant seeming to be proving milder than first feared.
European and US Covid case numbers are at record levels, with the World Health Organization (WHO) warning the omicron variant could still lead to overwhelmed healthcare services in many countries.
Yesterday the US hit a record number of new Covid cases, with 265,427 reported on a seven-day moving average, which beat January’s peak of 251,085.
Countries such as France and Greece today report record highs, while the UK yesterday marked another record rise of daily Covid cases at 138,831, with over 800,000 people testing positive over the last seven days.
But leading scientist Sir John Bell, regius professor of medicine at the University of Oxford, told BBC Radio programme yesterday that Omicron “appears to be less severe and many people spend a relatively short time in hospital”, and high death rates from coronavirus in the UK are “now history”.
PCR positivity rates have doubled in England in the past 10 days. With rates of positive tests this high it's likely the ascertainment rate (the proportion of infected people who get counted as cases) is lower than ever. Quarter of a million infections a day is quite plausible. pic.twitter.com/H3VEfKGoyh
— Colin Davis (@ProfColinDavis) December 28, 2021
In the first day of trading after the festive break, Ladbrokes owner Entain PLC (LSE:ENT) and Spirax-Sarco Engineering PLC (LSE:SPX) are topping the leaderboard, followed by Hikma Pharmaceuticals PLC (AIM:HIK, OTC:HKMPF), Rolls-Royce Holdings PLC (LSE:RR.) and Electrocomponents PLC (LSE:ECM).
Others in the top ten include clothes retailer Next PLC (LSE:NXT), despite research from Springboard that footfall at UK shops on Boxing Day fell 41% compared to pre-pandemic levels amid concern over the Omicron variant and Sunday trading.
The figures were at least higher than last year, when the country was under tighter restrictions.
Shopping centres saw footfall plunge almost 50% compared to the same day in 2019, while high streets and retail parks saw falls of 38% and 40%.
Next was one of the retail chains that didn't open its stores on Boxing Day.
7.55am: Boxing Day sale?
The FTSE 100 is expected to be sold off in early trade on Wednesday, the first day after the Christmas break, as investors take a view on regional and national coronavirus lockdowns around the world as the omicron variant continues to surge.
London's blue-chip index is seen by falling 13 points, according to spreadbetters on the IG platform, having gined around a hundred points in the week before the festive weekend to finish at 7,372.10.
Overnight, Wall Street was mixed, with the Dow Jones Industrial Average jumping 0.26%, the S&P 500 index dipping 0.10% and the Nasdaq dropping 0.56%, while the small-cap focused Russell 2000 fell 0.66%.
Market analyst Naeem Aslam at AvaTrade reckons investors are optimistic that we are not going to see safety restrictions put in place as a protection against omicron remain in place for an extended period of time.
"Supply chain issues are already profound and no one wants to see them becoming more worse as it will hurt economic growth in the US and rest of the world," he said.
"Today, investors will be looking at wholesale inventories data to see how businesses project economic activity will be like in the short term. Similarly, pending home sales data is also scheduled to be released today.
"Overall, market sentiment was mixed due to a rise in coronavirus cases in the United States. As a result, investors are weighing the risks of rapidly rising COVID-19 cases against aggressive monetary tightening by the Federal Reserve to determine what economic growth will look like in 2022."
6.50am: Early Markets - Asia / Australia
Asia-Pacific shares were mostly lower on Wednesday following a mixed session on Wall Street overnight as investors grappled with an increasing number of Omicron cases globally.
The Chinese city of Xian reported 151 domestically transmitted infections on Tuesday, or nearly all of the 152 cases nationwide, bringing the total number of local cases in Xian to nearly 1,000 during the Dec. 9-28 period.
China’s Shanghai Composite fell 0.87% and Hong Kong’s Hang Seng index slumped 1.13%.
The Nikkei in Japan slipped 0.56% while South Korea’s Kospi dipped 0.89%.
Australia’s S&P/ASX 200 was an exception, closing 1.21% higher at 7,509.8 points, its highest level since September 8.