Home Finance FTSE 100 hits fresh 1-1/2 year high

FTSE 100 hits fresh 1-1/2 year high

Britain’s FTSE 100 rose in the first trading session of 2022. This is after its best annual gain in five years. That too after following signs the Omicron coronavirus variant is less likely to derail the global economic recovery. The blue-chip FTSE 100 has gained 1.6%. The domestically focussed mid-cap index advanced 1.8% in a catch-up rally. Financials led gains, with banking and life insurance stocks adding 4.8% and 3.2% respectively.

Ipek Ozkardeskaya, senior analyst at Swissquote stated that a higher rate cycle always calls for a better performance for the banks. This is because it is going to be helpful in their profits, especially their interest rate margins. The yield on two-year British government bonds hit its highest since late October. This is after Prime Minister Boris Johnson said new measures were not needed now to fight the Omicron variant. London-listed airline stocks soared, with Wizz Air, EasyJet and British Airways-owner IAG gaining between 7.5% and 10%. This is after Hungary-based Wizz Air reported strong load factor data.

Prime Minister Boris Johnson was due to hold a pandemic news conference, amid a surge of the Omicron variant that has led to record high coronavirus cases. The FTSE 100 gained 14.3% in 2021. This is helped by gains in commodity-linked and industrial stocks. British retailers gained 1.0%, tracking global sentiment. This is even though footfall in shops in the days after Christmas was 24.5% lower than the same week in 2019. British manufacturing grew slightly more quickly than originally thought. Pandemic-related supply chain problems eased a bit, taking some of the heat out of rising input prices.

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