London stocks finished lower on Monday, with selling pressure particularly strong among travel and leisure names as the government stepped up its response to the ‘Omicron’ variant of Covid-19.
The FTSE 100 ended the session down 0.82% at 7,231.44, and the FTSE 250 was 1.22% weaker at 22,647.22.
Sterling was also in negative territory, last trading down 0.29% on the dollar at $1.3234, and slipping 0.09% against the euro to change hands at €1.1716.
“It might nearly be time for the Santa rally to start, but the sellers haven’t given up just yet, and indices have gone sharply into reverse this afternoon,” said IG chief market analyst Chris Beauchamp.
“The US appears to be responsible for the rug-pull across stock markets, thanks to nervousness ahead of the Federal Reserve meeting.
“While the Bank of England, European Central Bank and the Bank of Japan are all up this week, the Federal Reserve is the only game in town ahead of Christmas, and will dominate everyone’s thoughts up until the decision Wednesday evening.”
Beauchamp said Friday’s late bounce for equity markets was now wiped out, although traders still looked to be digesting their huge gains from the beginning of December.
“A Fed meeting provides a natural reason to cut back on risk, and there is still plenty of time for the festive rally to get going in the second half of the week and on into Christmas.
“Unsurprisingly the losers on the FTSE 100 are IAG and Rolls Royce, stocks almost tailor-made for this year’s on-off sentiment with regard to global travel.
“Talk of more restrictions for the UK do not provide a conducive environment for these stocks to bounce, and for shareholders in these companies it could be a lean Christmas.”
The National Health Service found itself under pressure once again on Monday, as people rushed to get Covid booster jabs and the first death was reported from the Omicron variant of the virus.
Local media reported wait times of up to five hours as the government opened bookings for people aged 30 to 39 in England.
The NHS website was also said to be repeatedly crashing due to the surge in demand.
That chaos increased as lateral flow tests orders via the government’s website had to be temporarily suspended “due to exceptionally high demand”, the UK Health Security Agency (UKHSA) said.
“Everyone who needs a lateral flow test can collect test kits – either at their local pharmacy, some community sites and some schools and colleges,” the UKHSA said in a statement.
“Due to exceptionally high demand, ordering lateral flow tests on gov.uk has been temporarily suspended to fulfil existing orders.”
Its statement came less than half an hour UK Prime Minister Boris Johnson told broadcasters there was still a “ready supply” of lateral flow tests as the government imposed a requirement that daily testing would become mandatory for anyone double-jabbed who comes into contact with a Covid-19 case.
On the economic front, a record number of UK manufacturers raised prices in the face of strong inflationary pressures during the fourth quarter of 2021, according to the Make UK/BDO manufacturing outlook survey.
UK prices rose from a balance of +50% in the third quarter to +52% in the fourth, with an expected increase to +58% pegged for the next quarter – the highest balances in the survey’s history.
Make UK/BDO stated that to give an indication of just how sharply inflation has bitten, and how manufacturers have responded to it, the equivalent balance in the fourth quarter of 2019, just before the onset of the Covid-19 pandemic and leaving the EU, was just +5%.
“While manufacturers will be able to enjoy some festive cheer this year, their spirits will be tempered by the eye-watering impact of escalating cost pressures which are leading an increasing number to pass these on to the consumer,” said Make UK senior economist James Brougham.
“Given the global nature of some of these pressures there is little sign that they will abate anytime soon.
“However, they will hope as we enter a fresh year that these will gradually unwind, with the compensation being that demand prospects among their major markets continue to look strong.”
Britain’s hectic property market, meanwhile, was expected to ease and return to more “normal” levels next year, although prices would still rise by 5% according to data from real estate platform Rightmove.
The company said on Monday that the typical property asking price dipped in December, down 0.7% – a sign of a return to more traditional trends.
Rightmove’s director of property data Tim Bannister, said the market could stabilise, despite the impact of the Covid pandemic.
“With a jump in the number of owners requesting valuations from agents with a view to marketing their homes, it looks like many of this group are now gearing up to make it a new year resolution to move, so more buyer choice could now be on the cards,” Bannister said.
In equities, online estate agency Purplebricks Group tumbled 20.89%, the firm having delayed its results after it emerged it was facing potentially millions of pounds of claims.
The company was due to publish interim numbers on Tuesday, but had already warned they were likely to be worse-than-expected on the back of challenging trading conditions.
Specialist recruiter SThree was 13.19% weaker even after it unveiled a 19% year-on-year rise in group net fees for the full-year, on the back of a 25% jump for the fourth quarter.
The group also said that it had “excellent visibility” heading into 2022 thanks to 43% growth in its order book.
Home repairs and improvement business HomeServe lost 3.95% after it sold policies shared with Piedmont Natural Gas Company to the same affinity partner for around $22m.
The deal between HomeServe and US-based Piedmont was due to expire next April, but the company decided to sell the policy book rather than continue managing it in a run-down to the end of the arrangement.
Dunelm was 2.29% weaker after it revealed that chief financial officer Laura Carr would leave the retailer in June 2022 to take up a new position elsewhere.
The company also said it had continued to see “strong trading momentum” since its first quarter trading update back in October.
Infrastructure specialist Costain Group slid 7.35% after saying it now expected an overall cash outflow from its contract with SSE, following recent adjudication decisions.
On the upside, Jupiter Fund Management jumped 7.19% after the Financial Mail on Sunday reported that it had hired Robey Warshaw to advise it on how to bolster its defences against a potential buyout offer amid the merger frenzy that has gripped the City.
Market Movers
FTSE 100 (UKX) 7,231.44 -0.83%
FTSE 250 (MCX) 22,647.22 -1.22%
techMARK (TASX) 4,425.67 -0.54%
FTSE 100 – Risers
Fresnillo (FRES) 881.40p 2.35%
Aveva Group (AVV) 3,333.00p 2.08%
Antofagasta (ANTO) 1,386.50p 1.13%
Hikma Pharmaceuticals (HIK) 2,255.00p 1.04%
Ferguson (FERG) 12,485.00p 0.97%
United Utilities Group (UU.) 1,130.00p 0.80%
AstraZeneca (AZN) 8,248.00p 0.67%
Intertek Group (ITRK) 5,750.00p 0.67%
Smurfit Kappa Group (CDI) (SKG) 3,990.00p 0.66%
Kingfisher (KGF) 334.50p 0.48%
FTSE 100 – Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 130.30p -5.15%
Rolls-Royce Holdings (RR.) 116.94p -4.77%
Lloyds Banking Group (LLOY) 44.37p -4.28%
Entain (ENT) 1,574.50p -3.74%
Whitbread (WTB) 2,800.00p -3.49%
InterContinental Hotels Group (IHG) 4,489.00p -3.30%
British Land Company (BLND) 503.00p -3.16%
Flutter Entertainment (CDI) (FLTR) 10,610.00p -3.09%
Burberry Group (BRBY) 1,768.50p -2.83%
Polymetal International (POLY) 1,290.50p -2.79%
FTSE 250 – Risers
Jupiter Fund Management (JUP) 250.60p 7.19%
Moonpig Group (MOON) 357.00p 5.54%
Watches of Switzerland Group (WOSG) 1,452.00p 2.68%
Ashmore Group (ASHM) 290.20p 1.54%
Trustpilot Group (TRST) 339.00p 1.38%
Dechra Pharmaceuticals (DPH) 5,070.00p 1.18%
Renishaw (RSW) 4,566.00p 1.02%
LondonMetric Property (LMP) 276.80p 0.95%
Tritax Big Box Reit (BBOX) 240.60p 0.84%
Spectris (SXS) 3,629.00p 0.83%
FTSE 250 – Fallers
Capita (CPI) 37.02p -18.67%
Trainline (TRN) 256.00p -6.36%
IWG (IWG) 259.40p -6.30%
Cineworld Group (CINE) 44.13p -6.27%
Wood Group (John) (WG.) 181.60p -5.61%
Wetherspoon (J.D.) (JDW) 820.00p -5.42%
C&C Group (CDI) (CCR) 218.00p -5.30%
Hammerson (HMSO) 31.02p -5.02%
Aston Martin Lagonda Global Holdings (AML) 1,230.50p -4.87%
SSP Group (SSPG) 220.60p -4.87%
