The FTSE 100 continued along the Omicron rollercoaster on Tuesday with Londons leading index rebounding from Monday’s losses.
However, the gains were mild with the FTSE 100 adding 0.29% to trade at 7,251, at the time of writing, as investors await results of major central bank meetings this week.
“The FTSE 100 was off to a strong start on Tuesday, recovering some of yesterday’s losses as investors await the big central bank action to come this week and as concern over the Omicron variant continues to wax and wane,” says AJ Bell investment director Russ Mould.”
Highlighting the conundrum for central banks, Mould alluded to the ‘good news is bad news’ sentiment around UK jobs data that showed wage rises.
“More signs of a tightening jobs market may be good news for employees but could also add to inflation concerns ahead of the Bank of England’s meeting on Thursday.”
“However, a move on rates looks unlikely given the uncertainty over the economic impact of Omicron,” Mould said despite the Bank’s governor saying it didn’t see Omicron as a ‘stress event’.
FTSE 100 movers
BT was the FTSE 100’s biggest faller as investors sold the stock on perceptions the chance of a takeover bid was diminishing.
“News that French telecoms tycoon Patrick Drahi’s firm Altice had boosted its stake in BT seems to have provoked consternation in the market, with the shares slumping, potentially amid some disappointment that a full bid doesn’t look to be forthcoming, at least in the short-term,” said Mould.
Ocado topped the FTSE on Tuesday morning after the online retailer said they expected a strong Christmas.
“Ocado Retail is predicting a merry Christmas, underpinned by strong demand, but the new year poses some more challenging questions. Labour shortages, cost inflation, another round of ramped up capital spending, and fierce competition all spring to mind,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.