London close: Shares finish brutal '22 in red as Covid worries persist

UK shares closed out a brutal 2022 in the red as fears over the spread of Covid cases in China combined with a lifting of border restrictions by Beijing continued to spook investors.

On a half-day of thin trade the FTSE 100 lost 0.52% to close at 7,473.

The year has seen Russia's unprovoked invasion of Ukraine, which in turn helped to fuel post-Covid pandemic inflation, which pushed global interest rates higher, which created a cost-of-living crisis that has seen consumers struggle to pay bills, which added up to a battering for equities. The Footsie is set to post a gain for the the year of around 1.7%.

US stocks thumbed their collective nose at 2022 with a rally on Thursday as investors went bargain hunting. Crude oil prices fell as a surge of Covid cases in China exacerbated fears of global economic downturn.

There was no major corporate news to report. The UK government was still prevaricating over whether to demand negative Covid test results from an expected influx of travellers from China. The US, Italy and Japan have already imposed the requirement.

“The FTSE 100 is on track to sharply outperform the FTSE 250 in 2022. The smaller index is broadly flat year-to-date whereas the larger is down by 20%. The FTSE 250 is more closely correlated to the UK economy and has been weighed down by this year’s domestic economic and political uncertainty," said Interactive Investor head of investment Victoria Scholar.

"The FTSE 100 however is more of an outward looking global index that does not reflect the fundamentals of the UK economy. Not only has it outperformed the FTSE 250, but it has also outshined its European equivalents such as the DAX in Germany and the CAC in France thanks to its favourable sectoral mix."

Scholar noted that the war in Ukraine had boosted oil and defence stocks, with Shell up by more than 35% year-to-date and Glencore rallying over 40% driven partly by a spike in commodity prices.

Arms company BAE Systems has gained 55% this year, also on the back of the war.

In economic news, UK house price growth decelerated at pace in December, according to lender Nationwide, with prices delivering their worst performance since the banking industry cause the financial crash of 2009.

In annual terms, house price growth dropped to 2.8% in December, down from 4.4% in November but ahead of the 2.3% growth rate predicted by economists.

Nationwide said on Friday that prices had dipped 0.1% month-on-month in December for a fourth consecutive fall and the worst run since 2008. Economists had pencilled-in a fall to 0.7%.

The findings hit housebuilding and sector-related shares, with Persimmon, Taylor Wimpey, Barratt, Rightmove and mortgage lender Lloyds Bank all down.

Reporting by Frank Prenesti for Sharecast.com

Market Movers

FTSE 100 (UKX) 7,473.66 -0.52%
FTSE 250 (MCX) 18,890.76 -0.56%
techMARK (TASX) 4,389.97 -0.47%

FTSE 100 - Risers

JD Sports Fashion (JD.) 126.15p 2.44%
Coca-Cola HBC AG (CDI) (CCH) 1,973.00p 2.25%
Fresnillo (FRES) 901.80p 1.85%
Next (NXT) 5,836.00p 1.46%
Scottish Mortgage Inv Trust (SMT) 722.80p 0.98%
Rolls-Royce Holdings (RR.) 93.20p 0.81%
Haleon (HLN) 329.20p 0.70%
Melrose Industries (MRO) 134.70p 0.52%
Admiral Group (ADM) 2,137.00p 0.47%
Smith & Nephew (SN.) 1,109.50p 0.36%

FTSE 100 - Fallers

Persimmon (PSN) 1,217.00p -3.03%
BT Group (BT.A) 112.05p -2.73%
Ocado Group (OCDO) 616.80p -2.62%
Rightmove (RMV) 511.40p -2.48%
Halma (HLMA) 1,974.00p -2.28%
Auto Trader Group (AUTO) 515.60p -2.24%
Schroders (SDR) 436.00p -2.11%
Taylor Wimpey (TW.) 101.65p -2.07%
DCC (CDI) (DCC) 4,080.00p -2.04%
Barratt Developments (BDEV) 401.00p -2.03%

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 80.20p 2.82%
Oxford Instruments (OXIG) 2,260.00p 2.03%
PureTech Health (PRTC) 266.50p 1.91%
Helios Towers (HTWS) 106.10p 1.82%
IWG (IWG) 166.00p 1.75%
Liontrust Asset Management (LIO) 1,120.00p 1.63%
Petershill Partners (PHLL) 169.00p 1.56%
Just Group (JUST) 81.60p 1.05%
Indivior (INDV) 1,852.00p 0.93%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 87.80p 0.92%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 154.05p -6.86%
Wizz Air Holdings (WIZZ) 1,904.50p -3.20%
PZ Cussons (PZC) 209.50p -2.78%
Wood Group (John) (WG.) 135.15p -2.59%
Future (FUTR) 1,267.00p -2.54%
Coats Group (COA) 66.20p -2.50%
Mitie Group (MTO) 74.60p -2.48%
Tullow Oil (TLW) 36.98p -2.48%
Discoverie Group (DSCV) 731.00p -2.40%
Howden Joinery Group (HWDN) 561.60p -2.33%