UK shares steady as vaccine cheer offsets fears about new restrictions

The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville
  • Berkeley Group jumps on raised annual profit outlook
  • Airline stocks hit by worries of travel restrictions
  • FTSE 100, FTSE 250 flat

Dec 8 (Reuters) - UK's main stock indexes ended flat on Wednesday after hitting session lows as positive headlines on COVID-19 vaccines helped offset concerns about Britain implementing tougher coronavirus measures as early as Thursday.

The blue-chip FTSE 100 (.FTSE) turned negative before ending flat as gains in travel-related (.FTNMX405010) and healthcare stocks offset commodity-linked weakness.

Several media reports said Prime Minister Boris Johnson might announce a new coronavirus Plan B which could include advice to work from home and COVID passports for large venues. read more

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However, markets were quick to reverse losses after BioNTech and Pfizer (PFE.N) said a three-shot course of their COVID-19 vaccine showed a neutralising effect against the new Omicron variant in a laboratory test.

"The Pfizer news is feeding into that more positive picture that's being built around Omicron," said Craig Erlam, senior market analyst at Oanda.

"This idea is that it's not all doom and gloom, just because this variant is more vaccine resistant, it doesn't mean the vaccines are now useless, is building a more positive picture than what we were facing a week last Friday," Erlam added.

The mid-cap FTSE 250 index (.FTMC) ended flat, weighed by weakness in industrials and technology stocks.

Cineworld (CINE.L) dropped 2.6% and was the top loser on the travel and leisure sub-index (.FTNMX405010).

UK's benchmark FTSE 100 has rebounded to levels seen before the detection of the Omicron variant in late-November, as experts say the new strain might not be as severe as feared.

Tour operator TUI recouped early losses and rose 1.7% despite posting an annual loss of over 2 billion euros ($2.26 billion). read more

Homebuilder Berkeley Group Holdings (BKGH.L) added 2.4% as it raised annual profit outlook after sales recovered to pre-pandemic levels. read more

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Reporting by Bansari Mayur Kamdar and Amal S in Bengaluru; Editing by Subhranshu Sahu, Uttaresh.V, William Maclean and Krishna Chandra Eluri

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