Stock market reaches 22-month high in post-christmas bounce

The FTSE 100 mustered a post-christmas bounce yesterday, as stock markets in London opened for the first time since Friday’s half-day trading.

The market pushed to a 22-month high early in the day, briefly hitting 7,457.14 as fears over the Omicron strain ease.

Markets took a tumble earlier this month when it looked like the new strain might blow the global economic recovery from the pandemic off course.

But despite record new Covid cases in the UK, the FTSE appears to have left its Omicron blues behind, and has now reversed all its pandemic losses.

It closed up 0.7%, or 48.59, ending the day at 7,420.69.

“The FTSE is currently up... as continued optimistic news regarding the new variant is released, such as Boris Johnson announcing that there will be no further restrictions imposed, due to the low severity of Omicron,” said Spreadex expert Oliver Males shortly before markets closed in London.

“However, the same cannot be said for the rest of Europe as both the Dax and Cac dropped today, after most of Europe sees a ‘tsunami’ of cases, with France recording over 200,000 cases in the past 24 hours.

“This has in turn led UK travel stocks lower, such as IAG being down over 2%, and holiday operator, TUI, in the red by over 5%.

“Many experts are expecting the Omicron variant to have its real effect in 2022, as inflation is likely to soar, leading to rising interest rates, while the international supply chain is still going to be heavily disrupted.”

Germany’s Dax index closed down 0.7% while the Cac 40 in Paris ended the day 0.4% in the red.

In New York the S&P 500 was trading flat as European markets closed, while the Dow Jones had risen by 0.1%.

In currency markets, sterling dropped by less than 0.1% against its US and European peers. By the end of the day one pound would buy 1.3478 dollars or 1.1876 euros.

On a quiet day for London-listed companies, miner Anglo American said that it is talking to Brazil’s Vale about a potential partnership in the country.

“This has in turn led UK travel stocks lower, such as IAG