UK Stock Market Holds Steady with Vaccine Optimism
By Bansari Mayur Kamdar and Shashank Nayar
(Reuters) -UK’s main stock indexes gained on Wednesday after hitting session lows as positive headlines on COVID-19 vaccines helped offset concerns about Britain implementing tougher COVID-19 measures as early as Thursday.
The blue-chip FTSE 100 turned negative before rising 0.2% as a fall in sterling to fresh 2021 lows boosted the exporter-heavy index. [GBP/]
Several media reports said Prime Minister Boris Johnson might announce as soon as Wednesday a new coronavirus Plan B which could include advice to work from home and COVID passports for large venues.
However, markets were quick to reverse losses after BioNTech and Pfizer said that a three-shot course of their COVID-19 vaccine showed a neutralising effect against the new Omicron variant in a laboratory test.
“The Pfizer news is feeding into that more positive picture that’s being built around Omicron,” said Craig Erlam, senior market analyst at Oanda.
“This idea is that it’s not all doom and gloom, just because this variant is more vaccine resistant, it doesn’t mean the vaccines are now useless, is building a more positive picture than what we were facing a week last Friday,” Erlam added.
The mid-cap FTSE 250 index advanced 0.1%, but weakness in pub and restaurant stocks including Mitchells and Butlers, JD Wetherspoon and Restaurant Group, all down between 1.7% and 4.5%, limited further gains.
Cineworld dropped 5.1% and was the top loser on the travel and leisure sub-index, while British airline stocks Wizz Air, Easyjet and British Airways owner IAG fall more than 3% each.
UK’s benchmark FTSE 100 has rebounded to levels seen before the detection of the Omicron variant in late-November, as experts say the new strain might not be as severe as feared.
Tour operator TUI declined 0.8% after it posted an annual loss of over 2 billion euros ($2.26 billion).
Homebuilder Berkeley Group Holdings added 4.2% as it raised annual profit outlook after sales recovered to pre-pandemic levels.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Subhranshu Sahu, Uttaresh.V, William Maclean)
