Traders steady ship after Omicron storm

Global stock markets stabilised after the emergence of the omicron variant triggered a brutal sell-off last week.

The FTSE 100 gained 0.9pc, or 65.92 points, to 7109.95 while benchmarks in Europe also crawled a little higher.

but the rebound made up only a fraction of the ground lost on Friday when the Footsie tumbled nearly 4pc – wiping £72bn off the value of blue chip stocks.

With so much information and misinformation swirling around trading desks, investors remained on tenterhooks.

adam Pollock, head of broking at WH Ireland, said: ‘It’s hard to know what’s true.

‘How contagious is this, can the vaccines fight it, and are the new restrictions necessary?

‘all these questions need to be answered before the market heads in any meaningful direction.

‘Today’s recovery is a start but it’s important to remember the market fell nearly 4pc on Friday so we’re not even half way there.’

Pollock pointed out that the stock market is about future earnings, not present, and for now traders are betting against further lockdowns. as a result, airlines moved higher with Easyjet adding 0.6pc, or 2.8p, to 502.6p while Wizz Air climbed 5.5pc, or 204p, to 3933p. british airways-owner IAG made early gains, but eventually closed down 0.3pc, or 0.4p, at 131p.

other travel-related stocks such as cruise operator Carnival (up 2.8pc, or 33.6p, at 1216.4p) WH Smith (5.5pc, or 72.5p, at 1383.5p) helped drive the FTSE 250 up 1pc, or 218.44 points, to 22756.33.

back in the top flight, the oil giants were a driving force, with BP up 3.2pc, or 10.05p, to 327.7p and Shell up 2.4pc, or 37.6p, to 1594p.

a barrel of brent crude rose by 4pc, hovering at around $74 a barrel, a sharp improvement from Friday when it had dipped more than 10pc.

analysts at JPMorgan expect prices will continue to rise.

The Wall Street bank reckons brent will reach $125 a barrel in 2022 and $150 a barrel the year after due to a lack of spare capacity.

at a key opec meeting this week, the production cartel will be weighing up the threat of the omicron variant on global demand as well as recent releases of oil reserves by the US.

but while oilers recovered, banks were having a mixed session as the debate about when interest rates might rise raged on.

The emergence of the variant has clouded the outlook for the bank of England’s December 16 interest rate decision, and economists believe a hike may now be delayed until next year.

Traders and analysts had been confident of a 15 basis point rate hike to 0.25pc with pressure on the bank to get a grip on soaring inflation, which hit a decade high in october.

laith Khalaf, head of investment analysis at aJ bell, said omicron had ‘punctured expectations of a Christmas rate hike’, with markets now expecting the rise will occur in February instead.

His words echo those of bank of England chief economist Huw Pill who last week said that the latest strain of Covid-19 and any reintroduction of government restrictions as a result ‘clearly would change our view of the world’.

He described the emergence of omicron as ‘a punch in the face.’ banks tend to perform better when interest rates are rising and as a result only managed minor gains. Lloyds was up 1.7pc, or 0.8p, to 46.8p, Natwest gained 1.1pc, or 2.2p, to 210.4p and HSBC added 0.6pc, or 2.4p, to 416.45p.

one sector firmly in the red was trading platforms after performing strongly on Friday.

The Covid lockdowns have seen a spike in amateur traders, mostly young men in their bedrooms with time and money to spare betting on the stock market. but yesterday

Hargreaves Lansdown lost 5.6pc, or 80p, at 1341.5p, and AJ Bell was off 0.1pc, or 0.4p, at 396.8p.