The Herald

BT and AG Barr lead cautious FTSE bounceback

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MARKETS in Europe and the US bounced back from a bruising end to last week on Monday but failed to make up all of the ground lost in the panic sparked by a new Covid variant.

London’s FTSE 100 closed up by 65.92 points, or 0.9%, reaching 7,109.95 by the end of the trading day in Europe.

“As a result of last week’s declines investor confidence has taken a knock, and while the main focus has been primarily on the surge of Delta cases, the prospect of an even more infectious Omicron variant hasn’t been received well, with this rebound being a cautious one at best,” said CMC Markets analyst Michael Hewson.

“With scientists and health profession­als saying they need more time to assess the seriousnes­s of this variant, the next few days are likely to be choppy ones for those sectors most exposed to further restrictio­ns.”

In the early part of the day the rebound was led by some of the companies that were the biggest losers on Friday, including IAG, which owns British Airways.

But later in the day IAG gave back many of its gains.

“It seems likely that markets are less worried about the prospect of a new variant than they are about respective government­s’ reactions to it, which have been much more aggressive than previously,” Mr Hewson said.

“It is perhaps this concern, that having been behind the curve a year ago and then being forced to cancel Christmas plans at the last minute, that is behind this new aggressive approach, and that in going hard now government­s can give themselves wriggle room to allow a relaxation closer to the Christmas holiday period.”

The biggest winner on Monday on the FTSE 100 was BT, which soared after a report in The Mail On

Sunday that private equity companies might be circling its Openreach division.

It was also boosted when Ofcom, the telecoms regulator, said that it would drop a probe into the firm’s expansion of its broadband network to customers.

In Germany, the Dax index closed up 0.1%, while Paris’s Cac 40 rose 0.6%. In New York, the S&P 500 was up 1.2% by the end of play in Europe, while the Dow Jones had gained 0.5%.

In currency markets, the pound was worth 1.3306 dollars by the end of the day, a rise of 0.1%.,It also rose against the euro, to 1.1806.

In company news, shares of Sainsbury’s closed down by 1.3% after it announced plans to open its first checkout-free shops together with Amazon.

Shares in AG Barr, which makes Irn-bru, soared 13% as the company said that strong sales will push profits higher than previously expected for this year. It has gained from “on the go” and hospitalit­y markets, while new product launches have also done well.

Hammerson, which owns retail property, is in talks to sell its Silverburn shopping centre in Glasgow for around £140 million. Its shares rose by 1.5%.

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