London midday: Stocks fall amid worries about Omicron, rate hikes

London stocks were still in the red by midday on Thursday as concerns about the new Omicron Covid variant and potential rate hikes weighed on investors’ minds.

The FTSE 100 was down 0.7% at 7,119.72, having taken its opening cue from Wall Street, where stocks tumbled after the first US Omicron case was identified.

Russ Mould, investment director at AJ Bell, said: "As expected, the markets are continuing their up and down trajectory as traders and investors await confirmation on just how disruptive Omicron will be.

"The market is awaiting confirmation on the severity of the new Covid variant, the degree to which it escapes existing vaccines, and how infectious it is given this will likely dictate the global response in terms of restrictions.

"Then there is central bank uncertainty to weigh - will the Federal Reserve really go full steam ahead with tapering if the response to Omicron requires further lockdowns, and is a rate rise from the Bank of England before Christmas definitely off the cards given the dangers posed by runaway inflation?

"The usual Santa rally, with stocks enjoying a festive boom, seems unlikely to transpire against this backdrop, unless there is evidence in the near term which suggests Omicron is a less of a problem than feared."

In equity markets, financial services platform AJ Bell slumped even after it lifted its dividend and announced a special payout to shareholders as it increased annual profits by 13%.

Abrdn was also trading down after the asset manager confirmed it had agreed to buy subscription-based investment platform Interactive Investor for £1.49bn in cash.

Aston Martin Lagonda fell after it said Kenneth Gregor will step down as chief financial officer and as an executive director no later than 30 June 2022, for personal reasons.

Royal Mail, 3i Group, Ninety One, Johnson Matthey, Bellway and Pets at Home were all lower as they traded without entitlement to the dividend.

On the upside, British Airways and Iberia parent IAG advanced, along with budget airlines easyJet and Wizz, while oil giants BP and Shell gushed higher amid firmer oil prices.

Auction Technology rallied after it said full-year results were ahead of expectations, with revenue up 34%.

Workspace gained after an upgrade to ‘buy’ from ‘neutral’ at Bank of America Merrill Lynch.

Market Movers

FTSE 100 (UKX) 7,119.72 -0.68%
FTSE 250 (MCX) 22,730.49 -0.80%
techMARK (TASX) 4,364.20 -1.11%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 134.06p 1.75%
Royal Dutch Shell 'B' (RDSB) 1,632.20p 1.52%
Royal Dutch Shell 'A' (RDSA) 1,628.60p 1.34%
Berkeley Group Holdings (The) (BKG) 4,488.00p 1.33%
BP (BP.) 335.55p 0.80%
BHP Group (BHP) 2,091.00p 0.80%
Evraz (EVR) 593.60p 0.64%
Mondi (MNDI) 1,801.00p 0.53%
M&G (MNG) 190.85p 0.39%
Compass Group (CPG) 1,504.50p 0.37%

FTSE 100 - Fallers

Royal Mail (RMG) 480.30p -5.38%
Darktrace (DARK) 455.80p -4.36%
Entain (ENT) 1,651.50p -4.01%
JD Sports Fashion (JD.) 217.60p -3.76%
Pershing Square Holdings Ltd NPV (PSH) 2,905.00p -3.65%
Scottish Mortgage Inv Trust (SMT) 1,454.00p -3.26%
Ocado Group (OCDO) 1,684.00p -3.19%
Hikma Pharmaceuticals (HIK) 2,185.00p -2.80%
Prudential (PRU) 1,277.50p -2.78%
National Grid (NG.) 979.90p -2.69%

FTSE 250 - Risers

Auction Technology Group (ATG) 1,380.00p 4.39%
easyJet (EZJ) 538.40p 3.94%
Wizz Air Holdings (WIZZ) 4,369.00p 3.46%
Hammerson (HMSO) 32.31p 2.93%
FirstGroup (FGP) 97.90p 2.78%
Essentra (ESNT) 316.00p 2.43%
Cineworld Group (CINE) 50.22p 2.39%
National Express Group (NEX) 225.20p 2.27%
Workspace Group (WKP) 835.50p 2.01%
Apax Global Alpha Limited (APAX) 217.00p 1.40%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 1,449.00p -5.60%
Carnival (CCL) 1,160.20p -5.52%
Molten Ventures (GROW) 924.00p -4.35%
PureTech Health (PRTC) 288.00p -4.00%
Reach (RCH) 251.50p -3.82%
Brewin Dolphin Holdings (BRW) 340.00p -3.41%
Ninety One (N91) 250.20p -3.25%
Ashmore Group (ASHM) 290.00p -3.14%
Man Group (EMG) 213.70p -3.13%
Baillie Gifford US Growth Trust (USA) 330.00p -3.08%