The FTSE 100 rose gingerly on Monday morning as investors pondered the possibility of a fresh COVID wave and looked forward to key central bank meetings.

This Thursday, the Bank of England will release their interest rate decision and Wednesday will see the Federal Reserve release the minutes of their meeting.

Before the discovery of Omicron, both central banks look set to begin the tightening of monetary policy, however, the economic uncertainties around the new variant have cast doubt on these plans. Particularly for the Bank of England.

This was evident in the pound with sterling dropping as traders positioned for no change in rates. The inverse relationship between the pound and the FTSE 100 provided support for Londons leading index on Monday as it traded above 7,300, before falling back to trade at 7,295 at the time of writing.

“The FTSE 100 was off to a solid start on Monday despite Prime Minister Boris Johnson’s warning of a ‘tidal wave’ of Omicron in a televised address last night,” says AJ Bell investment director Russ Mould.

“However, this is less a case of investors shrugging off the news as it is the index responding as it usually does to weakness in the pound.”

“Sterling’s performance against other currencies reflects traders’ view on the immediate prospects for the economy and interest rates in the UK and its weakness flatters the overseas earnings which dominate the FTSE.”

“The pound bouncing around year lows suggests there is little expectation the Bank of England will raise rates at its meeting later this week. The BoE is one of several central banks to have meetings in the coming days, including the Federal Reserve which may begin tapering its stimulus for the US economy.”

“The question on the lips of British hospitality, leisure and travel businesses in particular will be: can the souped-up booster campaign really deliver one million jabs a day to cover all over 18s by the end of December and prevent the need for more onerous restrictions?”

IAG and Rolls Royce were unsurprisingly the biggest fallers on Monday morning as investors left travel stocks in the face of further disruption. IAG shares are now down 16% YTD and are approaching the lowest levels of the year.

Hilton Foods Group has completed £75m placing to fund the acquisition of, Fodden, a leading international smoked salmon producer.

The move is the latest in a string of acquisitions by Hilton Foods that include Dalco, a leading vegan and vegetarian food manufacturer and Fairfax Meadow.

Hilton have also invested in the expansion of Hilton Seafood, their leading supplier of seafood to the UK seafood market.

“The acquisition of Foppen is an exceptional opportunity for Hilton and another step towards our goal of becoming the global protein partner of choice. More and more consumers around the world are seeking affordable, high quality, and sustainable protein, and this acquisition will help Hilton take our offer into new markets and to new global customers for the first time,” said Hilton’s CEO, Philip Heffer.

“Foppen’s premium product portfolio and strong customer relationships are a great fit for Hilton’s model, while Hilton’s strong ESG credentials in seafood will make sure our future growth plans are sustainable in every sense of the word. We welcome Foppen’s management and employees and look forward to delivering profitable growth through the combination of Hilton and Foppen.”

In a recent trading update, Hilton Foods also pointed to promising developments in their Asia Pacific business that has experienced strong volume growth. In Europe, Hilton saw good volume growth across Tesco and Zabka, despite overall flat performance in the region due to the reopening of restaurants.

The FTSE 100 fell on Thursday following the announcement of new COVID restrictions by the UK government and soaring cases across Europe.

The FTSE 100 was down 0.2% at 7,322 at the time of writing around midday on Thursday.

“The page has been turned on the recovery story playing out on the financial markets this week, with the new chapter turning into  a tale of woe for many ‘reopening’ stocks,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

“News that fresh social restrictions are being imposed in the UK, amid worries that the new strain is more infectious have put a brake on the rebound of not just travel stocks but bricks and mortar retailers, and hospitality firms.”

Although the FTSE 100 fell, the selling was when mild when compared to the initial volatility in markets when Omicron was first observed.

Roll Royces was the worst performer on the FTSE 100 after the engine maker was hit by a double whammy of a disappointing trading update and the prospect of reduced flights in the near term.

“Rolls Royce is the biggest faller on the FTSE 100, with investors disappointed with the progress made, even before the latest Covid storm hit the airline industry,” Street said.

“There continues to be a gradual recovery in engine flying hours, a key metric given its core business is reliant on manufacturing and servicing commercial jet airlines, but it’s still slow progress.  They are still at half of normal levels and had been expected to recover to 55% by the end of the year. It shows what a climb Rolls Royce still needs to make to regain its pre-pandemic form and the Omicron variant is clearly another set-back.”

IAG was also a big faller as investors departed from travel stocks across Europe. IAG shares were down 2.8% at the time writing.

Despite the FTSE 100 falling, 41 constituents were positive at midday on Thursday.

DS Smith was among the gainers as revenues jumped 22% helped by their sustainable packaging offering and COP26.

“COP26 has helped DS Smith turn its box volumes up to record levels. The packaging giant has a leading position when it comes to sustainable packaging, so sentiment around the environment and responsible corporate behaviour, which has heightened in recent months, has quite literally paid dividends,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.