Markets on alert over new Covid variant but oil and shares rally

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IL prices and stock markets recovered somewhat today after a sharp fall on Friday, but the mood remains anxious as investors seek more information on the Omicron COVID-19 variant.

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In the face of the threat of a new pandemic, there is now serious doubt that the Bank of England will feel able to raise interest rates in December as many in the city had expected and expected.

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Markets around the world fell at the end of last week as news of the new version first emerged. New cases have been reported in the UK, the Netherlands and France, raising demand for stricter rules on social distancing and possibly lockdown.

Japan announced a ban on the entry of foreigners into the country. Tokyo shares fell nearly 2% and Hong Kong’s Seng index was down about 1%.

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The FTSE in London closed 56 points higher at 7100.

Susanna StreetMice Hargreaves Lansdowne, It says investors are seeing signs of optimism.

“Amidst the doom, which closed doors and imposed restrictions on travel routes from Africa, there are glimmers of hope. There are reports from doctors in South Africa that the Omicron infection does not appear to be more serious and the World Health Organization’s appeal for caution has also calmed some nerves.”

The price of oil rose 4% to $2.94 to $75.66 a barrel. Airline stocks such as EasyJet and Ryanair also recovered some of Friday’s losses.

But there was widespread concern that a possible winter lockdown would not bode well for the pound, economic growth or leisure and travel stocks.

There are signs that consumer enthusiasm remains. Consumer credit rose by £0.7 billion in October data, shown today, with mortgage lending up £1.6 billion.

Capital Economics said: “Overall, the data gives some encouraging signs that households became a bit more willing to borrow in October. But the increased risk of virus infection and/or a resurgence in tighter restrictions means that the outlook is somewhat lower. It threatens to implement any plan by members of the Monetary Policy Committee to raise interest rates on ice in December.

AJ Bell’s Russ Mold said some investors may have overreacted on Friday. But he added: “Markets are still cautious. We will almost certainly see more reports of Omicron spreading to various locations, as reported with cases in Scotland this morning. But the key to deciding future market movements will be data on the impact of the variant and further government decisions. ,

There are growing concerns about the health of Britain’s manufacturing sector.

Trade body Make UK said the sector is facing “an unprecedented combination of Covid credit, liquidity and cost crunch”.

Inflation in Spain has reached its highest level in 30 years, rising from 5.4% in October to 5.6% in November.

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