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MARKET WRAP: FTSE flies amid global stocks rally, oil surges, cryptos jump

EconomyDec 07, 2021 16:35
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Key Points

  • FTSE 100 closing price of 7,341.9 (+1.5%)
  • Fading Omicron fears lift risk assets
  • Broad-based stocks rally led by basic materials
  • GSK treatment effective against Omicron mutations
  • Oil jumps as Omicron risks reassessed
  • UK house prices rise at fastest pace in 15 years
  • Cryptocurrencies jump; Bitcoin reclaims $51,000

By Samuel Indyk

Investing.com – The FTSE 100 rallied along with other major global indices on Tuesday as fears that the Omicron coronavirus variant will dampen the economic recovery continue to fade. Early data from South Africa suggests that the severity of illness is lower among those that contract the variant although that is still not completely clear.

“Suggestions the new Covid strain might only trigger mild symptoms are prompting relief among investors and helping travel stocks take off,” said AJ Bell Investment Director Russ Mould, “however given the typical gap between infection and hospitalisation with coronavirus it remains early days in our understanding of just how virulent Omicron is.”

UK pharmaceutical company GlaxoSmithKline (LON:GSK) announced that its monoclonal antibody treatment for COVID-19 is effective against mutations of the new variant, according to pre-clinical data. The data from the study, which has not yet been peer-reviewed, showed the treatment is effective against all 37 identified mutations to date in the spike protein.

Shares in basic materials companies - including Glencore (LON:GLEN), Anglo American (LON:AAL) and Rio Tinto (LON:RIO) - were near the top of the FTSE 100 following upbeat Chinese trade data which showed iron ore imports reach a 16-month high.

WTI and Brent crude futures both continued their recovery, supported by the fading fears that Omicron would dampen demand and the Chinese trade data. Although many countries were quick to reintroduce travel restrictions upon the discovery of the variant, hopes that the severity of illness is less severe could see the restrictions eased sooner than during previous waves. Looking ahead, focus will be on the API inventory data and the EIA's short-term energy outlook.

GBP was trading mixed, falling against the USD but rising against the EUR ahead of next week’s big central bank meetings. On Wednesday, the Federal Reserve will announce their monetary policy decisions, followed by the European Central Bank and Bank of England on Thursday.

House prices in the UK rose by the fastest pace in 15 years in the three months to the end of November, according to Halifax.

Cryptocurrencies were higher across the board with Bitcoin reclaiming $51,000.

“Bitcoin provided a brief reminder that huge price swings go both ways when it plunged on the weekend but it's recovered much of those losses in the days that have followed,” said OANDA Senior Market Analyst Craig Erlam in an emailed note. “It's even climbed back above $50,000 but some big tests remain if it's going to recapture some bullish momentum in these uncertain times. The next one is $53,500 which was a big area of support last month.”

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MARKET WRAP: FTSE flies amid global stocks rally, oil surges, cryptos jump
 

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