LONDON MARKET MIDDAY: Europe hit by Omicron but Wall Street to rebound

(Alliance News) - Selling appeared to slacken at midday in London on Thursday, with the FTSE 100 ...

Alliance News 2 December, 2021 | 12:03PM
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(Alliance News) - Selling appeared to slacken at midday in London on Thursday, with the FTSE 100 remaining nearly 60 points in the red, as Wall Street readied for a rebound off Wednesday's rout.

The FTSE 100 index was down 57.53 points, or 0.8%, at 7,111.15 midday Thursday. The mid-cap FTSE 250 index was down 214.19 points, or 0.9%, at 22,698.54. The AIM All-Share index was down 5.06 points, or 0.4%, at 1,190.99.

The Cboe UK 100 index was down 0.8% at 705.00 points. The Cboe 250 was down 0.8% at 20,182.95, and the Cboe Small Companies flat at 14,851.91.

In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt were both 1.2% and 1.1% respectively on Thursday.

"The reversal in US markets last night has taken Europe down too, and despite some hopes of a bounce just after the open the overall tone remains gloomy," said Chris Beauchamp, chief market analyst at IG.

Sentiment was shaken overnight by news that the new Omicron variant has been identified in the US.

According to a statement by the Centers for Disease Control and Prevention, the person returned from South Africa on November 22, and their close contacts have all tested negative. The patient tested positive on November 29 and, while fully vaccinated, top health official Anthony Fauci said they had not received a booster shot.

The news sent Wall Street reeling, with the Dow Jones quickly giving up the session's gains to finish Wednesday 1.3% lower. However, index futures were looking more composed on Thursday. The Dow Jones was called up 0.9%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.4%.

In response to the latest coronavirus twist, US President Joe Biden will announce Thursday a winter campaign against Covid-19, with new testing requirements for travellers and a surge in vaccination efforts.

Biden will "announce that we are further strengthening our testing requirements so that starting early next week, all international travellers will be required to test negative within one day of their departure to the US," an official told reporters.

For domestic travellers, Biden will announce he is extending a mask mandate on airplanes, trains and other public transport through mid-March.

Despite the Omicron setback, British Airways-parent International Consolidated Airlines traded at the top of the FTSE 100 on Thursday, shares up 1.7% - possibly amid relief that while the US plans to strengthen testing requirements, it is not shutting borders entirely.

Oil majors rose going into OPEC's latest meeting. BP was up 0.7% while Royal Dutch Shell 'A' and 'B' shares were up 1.2% and 1.3% respectively, all amongst the top performers in the FTSE 100 at midday.

Major oil producers are due to meet Thursday to decide on output levels from January onwards, which could be frozen as the new Covid variant Omicron sparks turmoil.

The OPEC+ alliance led by Saudi Arabia and Russia has so far resisted US-led pressure to significantly boost output to rein in surging energy prices. The emergence of the new variant has further complicated the equation, leading to countries reinstating travel bans and mulling further restrictions that could tighten demand and hurt oil prices.

The 13 members of the Organization of the Petroleum Exporting Countries and their 10 allies are due to meet from 1300 GMT via video conference after technical discussions.

North Sea benchmark Brent oil was trading at USD69.85 a barrel on Thursday, down against USD71.88 late Wednesday.

At the bottom of the FTSE 100 was Royal Mail, shares down 5.3% as the stock went ex-dividend, meaning new buyers no longer qualify for the latest payouts.

Darktrace shares fell 5.2%. The cyber security firm was ousted from the FTSE 100 index in FTSE Russell's quarterly index review. The changes will be effective from Monday, December 20.

Johnson Matthey, which is also being booted from the FTSE 100, was down 1.8%.

At the bottom of the FTSE 250 was Aston Martin, the luxury car maker down 5.9% after Chief Financial Officer Kenneth Gregor decided to step own "for personal reasons". Warwick-based Aston Martin said that Gregor will be leaving his post no later than June 30 next year.

Auction Technology rallied 4.8% as revenue for the financial year to September 30 nearly doubled to GBP70.1 million from GBP35.5 million reported for the eight-and-a-half month contribution in the 2020 financial year. On an aggregated basis, which assumes that the acquisitions of Proxibid and Turner Topco took place at the start of the 2020 financial year, revenue increased 34%.

Its pretax loss widened to GBP27.3 million from GBP19.0 million as administrative expenses jumped to GBP66.5 million from GBP25.6 million, relating to its IPO, and its acquisition of North American marketplace Proxibid and LiveAuctioneers during the period.

Elsewhere in London, Digitalbox shares surged 36% after the digital media business said it expects revenue and earnings before interest, tax, depreciation and amortisation for 2021 to be significantly ahead of market consensus, which stands at GBP700,000 for Ebitda, while expected revenue is to be at least GBP3.3 million.

"Trading across the Digitalbox's three brands has been stronger than anticipated in the second half of the year, which represents the company's biggest trading period," the owner of the Daily Mash and the Tab said.

Coming up in the economic events calendar on Thursday are US jobless claims numbers at 1330 GMT.

Sterling was quoted at USD1.3330 on Thursday, rising from USD1.3315 at the London equities close on Wednesday.

The euro traded at USD1.1342, firm against USD1.1325 late Wednesday. Against the yen, the dollar dropped to JPY112.92 from JPY113.02.

Gold was quoted at USD1,777.27 an ounce, lower than USD1,785.55 on Wednesday.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Digitalbox PLC 11.10 GBX -1.33 -
Auction Technology Group PLC When Issue 1,156.00 GBX -0.17 -
BP PLC 389.15 GBX -1.26
Darktrace PLC 436.40 GBX 4.65 -
Royal Mail PLC 473.70 GBX -3.62 -
Royal Dutch Shell PLC B 1,839.20 GBX -1.72
Aston Martin Lagonda Global Holdings PLC Ordinary Shares 1,299.50 GBX 0.23 -
Royal Dutch Shell PLC Class A 1,838.40 GBX -1.66
International Consolidated Airlines Group SA 162.56 GBX 1.60

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