European markets rebound amid hopes Omicron effects could be mild
London stocks bounced higher as a result, driven by solid increases for travel, leisure and hospitality firms.
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Your support makes all the difference.European markets sprang back into life as comments from the World Health Organisation that the Omicron variant of Covid-19 could be mild gave traders a lift.
London stocks bounced higher as a result, driven by solid increases for travel, leisure and hospitality firms.
Nevertheless, they lagged behind the likes of Germany, where positive noises regarding the variant helped to soothe increased concern over rebounding Covid case numbers.
Away from Omicron, markets were also able to look beyond the surprise shift from Fed chairman Jerome Powell on Tuesday that the central bank was looking to focus further on the inflation part of its mandate.
The FTSE 100 closed 109.23 points, or 1.55%, higher, at 7,168.68p on Wednesday.
Elsewhere, the German Dax increased by 2.47% and the French Cac increased by 2.39%.
Michael Hewson, chief market analyst at CMC Markets UK, said: “Markets in Europe are enjoying a decent turnaround today, starting December on a more positive note than how they finished November, as the Omicron seesaw in sentiment continues.
“This expectation of a more benign outcome, as a WHO official says early data shows existing vaccines should be effective, has seen a wholesale rebound in the likes of travel and leisure stocks, with British Airways owner IAG, and Premier Inn owner Whitbread leading the way.
“The lack of appetite for co-ordinated travel restrictions amongst EU leaders may well also be helping on the margins with easyJet and Wizz Air also showing strong gains.”
Across the Atlantic, Wall Street saw a similar jump as it also benefited from a sharp jump in job numbers in the ADP employment report for November.
Meanwhile, sterling recovered slightly after hitting a two-week low against the euro on Tuesday but lost steam slightly on the dollar.
The pound moved 0.03% lower versus the US dollar at 1.330, and increased 0.08% against the euro at 1.175.
In company news, Pendragon climbed after the car dealership increased its full-year profit outlook for the second time in less than two months as it said new car supply issues have not been as bad as feared.
The group said that, while there is still a shortfall of new cars, it was lower than expected in October and November.
Shares in the company rose by 1.7p to 20.3p as a result.
Meanwhile, Abingdon Health plummeted in value after the York-based lateral flow test manufacturer said it would sell up to £5.5 million worth of shares to make up for a capital shortfall which it expects in the first quarter of 2022.
The company finished 11p lower at 27p.
BT Group finished 7.7p higher at 166.3p as it continued to benefit from speculation it could be a takeover target.
The price of oil rebounded after dropping to a three-month low on Tuesday, with Brent crude up 2.28% at 70.81 dollars per barrel when the London markets closed.
The biggest risers on the FTSE 100 were BT, up 7.7p to 166.3p, Intermediate Capital Group, up 95p to 1,285p, Mondi, up 72p to 1,791.5p, London Stock Exchange, up 250p to 6,752p, and Darktrace, up 16.6p to 476.6p.
The biggest fallers on the FTSE 100 were Ocado, down 56p to 1,739.5p, United Utilities, down 299p to 9,816p, Pearson, down 10p to 583.4p, Hargreaves Lansdown, down 10p to 1,327.5p, and Polymetal, down 8p to 1,364p.