United Kingdom

FTSE 100 marks worst month in over a year on Omicron hit

2 minute read

A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville

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  • easyJet, travel stocks slide on fears of curbs
  • Costs for UK's service sector firms soar
  • AstraZeneca shares dip
  • FTSE 100 trims losses on recovery in mining stocks

Nov 30 (Reuters) - Britain's blue-chip share index closed above session lows on Tuesday, but marked its worst monthly decline in more than a year as concerns over the Omicron coronavirus variant hammered economically sensitive sectors.

The FTSE 100 (.FTSE) fell 0.7% after dropping as much as 1.7% through the day. It shed more than 2% inNovember.

Most sectors in the FTSE 100 retreated. But mining stocks staged a late recovery, helping the index pare some losses as they tracked a jump in iron ore prices.

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Prime Minister Boris Johnson said another lockdown was unlikely in light of the new variant, but would keep everything under review. read more

The domestically focussed mid-cap index (.FTMC) fell 1.0%.

Global stock markets slumped after comments from vaccine maker Moderna's head (MRNA.O) that existing COVID-19 vaccines were unlikely to be as effective against the Omicron variant as they have been against the Delta version. read more

Drugmaker AstraZeneca (AZN.L), which also makes COVID-19 vaccines, fell 1.1%.

British airline easyJet (EZJ.L) slid 1.2% after reporting some softening of trading in its first quarter on COVID-19 outbreaks and the discovery of the Omicron variant. Broader travel and leisure stocks also sank. read more

"It almost feels like minus 10% for travel stocks is the new black," said Max Kettner, multi-asset strategist at HSBC.

"Sentiment around reopening stocks has hit absolutely rock bottom now and it's not just been a function of last Friday, but it has been a function of two or three months already."

Meanwhile, data showed costs were rising at the fastest rate in over 20 years for firms in Britain's services sector, putting the Bank of England in a tough spot as they face rising inflation and economic risks at the same time. read more

The internationally focussed FTSE 100 has underperformed its domestic counterpart so far this year, gaining 8.3% compared with the 9.6% rise in the FTSE 250 index.

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The internationally focused FTSE 100 has underperformed its domestic counterpart FTSE 250 so far this year
Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Subhranshu Sahu Uttaresh.V and Keith Weir

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