London: Stocks climb as Omicron fears fade

[BENGALURU] UK shares rose on Thursday (Dec 12) as markets globally rallied after 2 research studies showed Omicron was less severe compared with the Delta coronavirus variant, lifting investor sentiment.

The blue chip FTSE 100 gained 0.2 per cent, extending its 2-day rally, led by financial stocks as banks advanced 0.8 per cent as UK gilt yields picked up.

"The risk sentiment is still there but investors want to see the glass half full," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. "Though, the sentiment is still fragile and vulnerable to any piece of negative news that could just come and change the direction of the wind very rapidly."

Gains on the benchmark index were capped by a weakness in US dollar-earner companies like British American Tobacco falling 2.5 per cent on a strong pound.

"Given that the volumes are relatively thin, there is very little narrative to really sort of cling onto or trade on," said Justin McQueen, market analyst at DailyFX.

The domestically focused mid-cap index added 0.7 per cent with airline stocks Wizz Air and EasyJet leading gains. The travel and leisure index was among the lead gainers on easing concerns about Omicron.

British car manufacturers had their slowest November in 37 years as the sector struggled to cope with the pandemic's impact on global supply chains, industry data showed.

The automobiles and parts index has underperformed the other sectors and the benchmark index so far this year, shedding nearly a quarter of its value so far this year, compared to a 13.6 per cent recovery in British mid-caps.

Businesses have reported their weakest growth since the country was under lockdown earlier this year, and they expect a further slowdown in early 2022, the Confederation of British Industry (CBI) said on Thursday.

REUTERS