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MARKET WRAP: FTSE surges higher, oil rallies, cryptos nurse weekend losses

Economy8 hours ago (Dec 06, 2021 16:33)

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Key Points

FTSE 100 closing price of 7,233.91 (+1.6%)
Travel & leisure stocks higher as Omicron risk reassessed
Food delivery companies drop on EU crackdown worries
Oil higher on Omicron, Iran, Saudi news
GBP higher following comments from BoE’s Broadbent
Cryptos nurse weekend losses; Bitcoin

By Samuel Indyk – The FTSE 100 surged higher on Monday, lifted by travel and leisure stocks as fears that the Omicron variant would cause a halt to international and domestic travel appear to be fading. Comments from US pandemic adviser Dr Anthony Fauci appeared to be the catalyst as he said early indications on the severity of the Omicron variant were “encouraging”. The evidence so far suggests those infected only have mild symptoms.

British Airways parent IAG (LON:ICAG) was the best performing stock in the blue-chip index despite the UK announcing new stricter travel measures that include pre-departure testing before arriving in the UK.

In the FTSE 250, travel & leisure stocks, including FirstGroup (LON:FGP), Stagecoach (LON:SGC), Carnival (LON:CCL), Marston’s (LON:MARS), Restaurant Group (LON:RTN), J D Wetherspoon (LON:JDW), and EasyJet PLC (LON:EZJ) rallied between 5% and 11%.

At the other end, food delivery companies such as Just Eat (LON:JETJ) and Deliveroo (LON:ROO) tumbled on fears that the European Commission is set to propose stricter labour rules to regulate the gig economy.

WTI and Brent crude futures were higher as fears that Omicron would put a halt on oil demand are fading. Further adding to the positive tone in the market was news that Saudi Arabia had raised the selling price for crude to Asia and the US. Meanwhile, talks between Iran and world powers over the nuclear programme ended last week with no meaningful progress. The UK, France, and Germany released a joint statement warning that there is little chance of a successful negotiation unless Iran’s new hard line government rows back on its demand for substantial changes to the existing draft agreement. The tough discussions suggest it may be a while before Iranian crude begins to enter the market again.

Natural Gas futures in the US tumbled over 11% as weekend forecasts suggest milder than usual weather in the eastern two thirds of the nation.

GBP was stronger following comments from Bank of England rate setter Ben Broadbent who said the tighter labour market will add pressure on inflation. The comments are the last scheduled by a BoE member before they enter the blackout period ahead of next week’s meeting.

GBP/USD held above 1.3200 while EUR/GBP dropped as low as 0.8500 as the EUR weakened following soft German factory orders.

Bitcoin and other major cryptocurrencies were nursing losses following a weekend plunge that saw hundreds of billions wiped off the market cap.

Bitcoin is currently around 30% from its all-time high and continues to trade with high volatility.

“The sharp fall erased the last two months of gains, yet more evidence of the highly volatile nature of the asset,” said Hargreaves Lansdown (LON:HRGV) Senior Investment and Markets Analyst Susannah Streeter. “Crypto coins and tokens have been propelled higher in this era of ultra cheap money and as speculation swirls about just when central banks will start further tightening mass bond buying programmes and start raising interest rates, they are likely to continue to be highly volatile.”


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MARKET WRAP: FTSE surges higher, oil rallies, cryptos nurse weekend losses

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