London stocks ended firmly in the black on Tuesday, rebounding from losses in the previous session after Chancellor Rishi Sunak announced a fresh £1bn funding package to help England’s hospitality and leisure sectors weather a surge in Omicron cases.
The FTSE 100 closed up 1.4% at 7,297.41.
The measures include a £6,000 one-off cash grant per premises. In addition, the government will cover the cost of Statutory Sick Pay for Covid-related absences for small and medium employers. Sunak also announced an extra £30m in support for theatres and museums through the Culture Recovery Fund.
IG market analyst Joshua Mahony said: “While today’s rebound does provide some grounds for optimism in the investment community, it does seem to be playing into a wider theme of volatility as traders gauge whether this latest dip is there to be bought. Invariably the festive period can bring lower volumes, raising the likeliness of strong moves.
“Reopening stocks are on the front foot today despite ongoing concerns over the potential for post-Christmas government restrictions. The government’s decision to provide a fresh £1 billion package for businesses impacted by this covid surge does highlight a willingness to help alleviate a short-term slump in revenues.
“However, today’s announcement is largely a precursor to harsher restrictions in the coming days, with Boris Johnson expected to implement additional measures next week. The experience of South Africa does highlight how deaths can be kept to a minimum despite a rapid ramp-up in cases, yet the fear of an overwhelmed NHS does mean the UK government will want to spread the cases across a wider period of time.
“For airlines and cruise companies, the gains today highlight a feeling of optimism that another international shutdown will be averted. With the latest variant proving highly transmissible, a bid to stop community transmission is more important than imported cases.”
In equity markets, British Airways and Iberia owner IAG was the standout gainer on the FTSE 100, while engine maker Rolls-Royce and Premier Inn owner Whitbread also rose. On the FTSE 250, cruise operator Carnival, travel group Tui, and budget airlines easyJet and Wizz Air rallied.
Elsewhere, JD Sports advanced after Nike’s second-quarter earnings and sales beat expectations.
Housebuilders were on the rise, with Barratt, Taylor Wimpey, and Persimmon all higher after data from HMRC showed house sales rebounded in November.
Asset manager Schroders was trading up after it agreed to buy a 75% stake in specialist investment manager Greencoat Capital Holdings for an initial £358.0m.
Market Movers
FTSE 100 (UKX) 7,297.41 1.38%
FTSE 250 (MCX) 22,820.30 1.20%
techMARK (TASX) 4,484.04 1.25%
FTSE 100 – Risers
International Consolidated Airlines Group SA (CDI) (IAG) 139.98p 6.90%
Informa (INF) 499.00p 4.96%
Melrose Industries (MRO) 151.90p 4.90%
Associated British Foods (ABF) 1,997.00p 4.45%
JD Sports Fashion (JD.) 207.20p 4.02%
Compass Group (CPG) 1,587.00p 3.83%
Rolls-Royce Holdings (RR.) 114.56p 3.69%
Taylor Wimpey (TW.) 169.75p 3.51%
Whitbread (WTB) 2,881.00p 3.37%
Evraz (EVR) 606.00p 3.27%
FTSE 100 – Fallers
Ocado Group (OCDO) 1,640.50p -2.47%
Dechra Pharmaceuticals (DPH) 4,968.00p -2.40%
Auto Trader Group (AUTO) 708.00p -1.67%
Unilever (ULVR) 3,935.00p -1.17%
Sage Group (SGE) 815.20p -0.97%
Bunzl (BNZL) 2,845.00p -0.63%
Polymetal International (POLY) 1,276.50p -0.55%
Rightmove (RMV) 765.80p -0.44%
Sainsbury (J) (SBRY) 271.50p -0.44%
Electrocomponents (ECM) 1,158.00p -0.43%
FTSE 250 – Risers
Carnival (CCL) 1,392.00p 9.59%
TUI AG Reg Shs (DI) (TUI) 228.30p 6.63%
easyJet (EZJ) 536.80p 6.00%
Reach (RCH) 270.00p 5.68%
Micro Focus International (MCRO) 381.10p 5.28%
Wizz Air Holdings (WIZZ) 4,230.00p 5.12%
Hammerson (HMSO) 32.58p 4.79%
Aston Martin Lagonda Global Holdings (AML) 1,291.00p 4.75%
Virgin Money UK (VMUK) 171.00p 4.27%
888 Holdings (888) 296.00p 4.23%
FTSE 250 – Fallers
PureTech Health (PRTC) 279.50p -4.61%
Indivior (INDV) 251.60p -2.33%
Syncona Limited NPV (SYNC) 198.00p -1.98%
FirstGroup (FGP) 101.30p -1.84%
Premier Foods (PFD) 106.80p -1.84%
BH Macro Ltd. GBP Shares (BHMG) 3,790.00p -1.81%
Playtech (PTEC) 733.00p -1.68%
Tritax Eurobox (GBP) (EBOX) 114.20p -1.38%
Chrysalis Investments Limited NPV (CHRY) 224.00p -1.32%
Watches of Switzerland Group (WOSG) 1,362.00p -1.30%
