Lower markets showed signs of stabilization today after Friday’s violent reaction to the discovery of the Covid Omicron variant.
The FTSE 100 index fell 3.6 per cent ahead of the weekend but is expected to open higher, with US futures also pricing in a recovery.
Brent crude futures fell 11% on Friday, but are trading up 4% at $75.75 this morning.
The corporate focus will be on BT, following reports that India’s Reliance is considering a bid.
FTSE 100 rallies after Friday’s slump
The FTSE 100 index is expected to have a stable session today after falling 3.6% on Friday as traders digest the weekend’s developments related to the Omicron version.
CMC Markets is expecting another bumpy ride this week, but is predicting for now that London’s top flight will open 64 points higher at 7108.
Chief Market Analyst Michael Hewson said: “Early reports from South Africa suggest that despite the number of mutations currently identified, there have been no reports of hospitalizations or deaths as a result of this type of diagnosis, Which throws sharp focus why the market reaction was so violent last week.
“It’s certainly still very early days, amid uncertainty around the efficacy of this new strain’s treatment and vaccine, and while it may be more permeable, that doesn’t mean it’s more lethal, according to preliminary reports. With symptoms suggestive of “abnormal but benign” in nature.
“This may help explain why markets in Europe are set to rally this morning.”
Brent crude futures rose 4% to $75.75 a barrel, down 11% on Friday on fears that more Covid restrictions would undo the recovery of air travel and the broader global economy.
The developments will complicate life for OPEC ministers, who are due this week to consider whether to stick to their plan to increase monthly output by 400,000 barrels a day.
President Biden and other world leaders have recently called on the OPEC coalition to increase production to contain inflationary pressures.