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London stocks bounce back despite caution over Covid variants

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PA City Staff
·3-min read
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London’s markets rebounded into the green as travel and leisure firms recovered some of their losses from the previous session.

Sentiment had wavered on Tuesday amid fears of the impact of new Covid-19 variants but concerns appeared to have settled among traders.

The FTSE 100 closed 35.42 points, or 0.52%, higher at 6,895.29 on Wednesday.

Michael Hewson, chief market analyst at CMC Markets UK, said: “After the big declines seen yesterday, European markets have recovered some of their poise today, with the travel and leisure sector looking to find a bit of a base after recent declines.

“Meanwhile health care stocks have outperformed, due to a positive read across from US medical devices company Intuitive Surgical, which has sent Smith & Nephew shares to two-month highs.

“Rising infection rates in Asia, and India and Japan specifically, are raising concerns that any global economic recovery will face significant delays in a region where vaccination rates are well behind those of Europe and the US.”

In France and Germany, stocks were broadly positive as optimism about major corporate earnings announcements outweighed virus variant concerns.

The German Dax increased by 0.44% and the French Cac moved 0.74% higher.

Across the Atlantic, the US markets recovered after an initial dip as investors digested the worsening coronavirus situation in large parts of Asia.

Meanwhile, sterling and the dollar were both virtually inactive as traders favoured company stocks over currency.

The pound decreased by 0.01% versus the US dollar to 1.393 and was up 0.02% against the euro at 1.158.

The UK’s listed tobacco firms, BAT and Imperial Brands, rebounded slightly on Tuesday after they had started the week by slumping following reports that the Biden administration is considering tougher curbs on cigarettes.

In company news, Kier Group slipped in value after the construction firm and outsourcer launched an equity raise to combat its maturing debt.

It was 3.8p lower at 90.5p at the close of play after it said it expects to raise between £190 million and £240 million in funds.

Deliveroo and Just Eat Takeaway shares slid after rival Uber Eats said it will launch in Germany for the first time in a few weeks.

Pierre-Dimitri Gore-Coty, Uber’s senior vice-president of delivery, told the Financial Times it would be a “strategically important” country.

Shares in Deliveroo closed 9.8p lower at 233p, while Just Eat Takeaway dropped by 214p to 7,716p.

AIM-listed Catena Group soared after it revealed plans to acquire data science and machine learning firm Insight in a move which will also see the group renamed InsigAI. Shares rose by 18.5p to 77.5p.

The price of oil has stayed under pressure, dipping further as surging coronavirus cases in India have dented expectations about future demand.

The price of Brent crude oil decreased by 1.01% to 65.9 dollars per barrel.

The biggest risers on the FTSE 100 were Smith & Nephew, up 52p at 1,466p, Hikma, up 67p at 2,445p, Burberry, up 49p at 2,054p, and Imperial Brands, up 32.5p at 1,498p.

The biggest fallers of the day were Bunzl, down 80p at 2,424p, B&M European Value, down 17p at 551.6p, Just Eat Takeaway, down 214p to 7,716p, and Auto Trader, down 10.6p at 561.2p.