London open: FTSE rebounds after Omicron-fuelled selloff

London stocks rose in early trade on Monday, recovering some ground after worries about the new Omicron Covid variant sent markets tumbling at the end of last week.

At 0900 GMT, the FTSE 100 was up 0.9% at 7,110.36, having slumped more than 3% on Friday.

Richard Hunter, head of markets at Interactive Investor, said: "The global economic recovery is set for an unwelcome detour as investors assess the potential impact of the new Omicron variant.

"The volatility index has spiked sharply higher, with the main indices seeing a widespread wave of selling as the nemesis of markets, uncertainty, has returned. With little known at this stage about the new variant in terms of vaccine resistance and its level of contagion, many countries have taken swift action in closing their borders in an effort to prevent another global situation.

"There may be some lessening of volatility as more detail is released, and in any event the current malaise should delay the immediate pressure on monetary tightening as central banks assess the potential economic damage from the new strain.

"In the meantime, the immediate pressure remains, although the UK market is seeing something of a relief rally despite a weak session in Asian markets. The fluidity of the situation as knowledge of the Omicron variant increases over the coming weeks will, however, keep investors on high alert."

In equity markets, BT surged following a report that India’s Reliance Industries is considering making an offer for the London-listed telecoms group. According to the Economic Times, billionaire Mukesh Ambani's Reliance might make an unsolicited offer or try to get a controlling stake in the company. It was understood that Reliance may also suggesting partnering with BT's fibre optic arm Openreach and funding its expansion plans.

Hammerson rallied after the property company confirmed it is in discussions over the possible disposal of Silverburn, its flagship destination near Glasgow, which is held in a 50/50 joint venture with CPPIB. It also confirmed the pricing under discussion is £140m and added "there can be no certainty that a transaction will take place".

Venture capital tech specialist Molten Ventures gained as it reported a rise in net asset value (NAV) for the six months to September 30 on the back of a sharp rise in cash investments.

Travel and hospitality shares were also on the rise, having fallen heavily on Friday, with BA owner IAG, Premier Inn owner Whitbread, WH Smith, Restaurant Group and Carnival all higher.

Market Movers

FTSE 100 (UKX) 7,110.36 0.94%
FTSE 250 (MCX) 22,868.40 1.47%
techMARK (TASX) 4,408.77 1.01%

FTSE 100 - Risers

BT Group (BT.A) 165.60p 7.53%
Johnson Matthey (JMAT) 2,154.00p 4.26%
Intermediate Capital Group (ICP) 2,194.00p 4.03%
Entain (ENT) 1,777.00p 3.07%
JD Sports Fashion (JD.) 1,134.50p 2.95%
BP (BP.) 326.45p 2.77%
Land Securities Group (LAND) 762.00p 2.72%
Whitbread (WTB) 2,911.00p 2.61%
3i Group (III) 1,397.50p 2.57%
Compass Group (CPG) 1,490.50p 2.55%

FTSE 100 - Fallers

Polymetal International (POLY) 1,337.00p -2.59%
AstraZeneca (AZN) 8,345.00p -0.78%
Unilever (ULVR) 3,926.00p -0.65%
Abrdn (ABDN) 236.80p -0.55%
Sainsbury (J) (SBRY) 292.80p -0.27%
BAE Systems (BA.) 548.40p -0.25%
Reckitt Benckiser Group (RKT) 6,171.00p -0.24%
Severn Trent (SVT) 2,892.00p -0.24%
Fresnillo (FRES) 905.00p -0.20%
Meggitt (MGGT) 738.60p -0.19%

FTSE 250 - Risers

Molten Ventures (GROW) 926.00p 5.83%
WH Smith (SMWH) 1,385.00p 5.64%
Restaurant Group (RTN) 81.60p 5.15%
Carnival (CCL) 1,238.80p 4.73%
Investec (INVP) 370.00p 4.64%
Hammerson (HMSO) 31.87p 4.63%
888 Holdings (888) 334.00p 3.79%
IP Group (IPO) 116.20p 3.75%
Bridgepoint Group (Reg S) (BPT) 527.00p 3.74%
Diploma (DPLM) 3,232.00p 3.66%

FTSE 250 - Fallers

Hochschild Mining (HOC) 128.60p -2.65%
AO World (AO.) 108.70p -1.18%
Micro Focus International (MCRO) 384.90p -1.03%
Petropavlovsk (POG) 20.18p -0.79%
Contour Global (GLO) 185.60p -0.75%
Centamin (DI) (CEY) 94.74p -0.69%
TI Fluid Systems (TIFS) 218.50p -0.68%
Vietnam Enterprise Investments (DI) (VEIL) 765.00p -0.65%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 105.80p -0.38%
Cineworld Group (CINE) 48.29p -0.37%