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(Alliance News) - The FTSE 100 extended its new year's gains on Wednesday, even if a stronger pound did limit the index's advance somewhat compared to other European bourses.
Behind the move higher were pandemic recovery plays, with stocks such as miners, banks and leisure firms rallying.
The FTSE 100 index closed up 11.72 points, or 0.2%, at 7,516.87. The FTSE 250 ended down 125.47 points, or 0.5%, at 23,771.18, and the AIM All-Share closed down 1.91 points, or 0.2%, at 1,210.94.
The Cboe UK 100 ended up 0.3% at 746.14, the Cboe UK 250 closed down 0.4% at 21,167.84, and the Cboe Small Companies ended up 0.4% at 15,598.31.
In European equities on Wednesday, the CAC 40 in Paris ended up 0.8%, while the DAX 40 in Frankfurt ended up 0.7%.
Gains for sectors such as miners and financials helped the FTSE 100 edge higher on Wednesday.
"The continued outperformance of sectors such as mining, banks and oil points towards a resurgence of the 'rebound trade' for those stocks poised to benefit from an improving global economy and the expected rise in yields and interest rates around the globe, a theme supported by today's solid ADP report," said Chris Beauchamp, chief market analyst at IG.
Payroll processor ADP on Wednesday reported a blowout jobs figure for December. The latest ADP National Employment Report, a precursor to Friday's nonfarm payrolls, showed the US private sector added 807,000 jobs in December.
This was markedly above the forecast of 400,000 job additions, according to consensus cited by FXStreet, and it topped November's downwardly revised payroll growth of 505,000. It was the highest number of jobs added since May.
Wall Street was a mixed picture following the data, held back by tech stocks. The Dow Jones was up 0.2%, but the S&P 500 was down 0.2% and the Nasdaq Composite down 0.8%.
The dollar was on the back foot despite the ADP report, with traders looking towards the publication of US Federal Reserve minutes at 1900 GMT.
The pound was quoted at USD1.3562 at the London equities close Wednesday, up compared to USD1.3542 at the close on Tuesday.
The euro stood at USD1.1326 at the European equities close Wednesday, higher against USD1.1303 at the same time on Tuesday. Against the yen, the dollar was trading at JPY115.90, down compared to JPY116.03 late Tuesday.
"Gold and silver and benefitting from the drop in the US dollar as the inverse relationship between the metals and the greenback continues to be strong," commented David Madden at Equinti Capital.
Gold was quoted at USD1,823.20 an ounce at the London equities close Wednesday, higher against USD1,814.05 at the close on Tuesday.
Elsewhere in the commodities space, Brent oil was quoted at USD81.20 a barrel at the London equities close Wednesday, up from USD80.27 late Tuesday.
OPEC and its allies decided on Tuesday to maintain their policy of modestly boosting oil output next month as the rapidly spreading Omicron variant has so far not heavily hit demand. The OPEC+ grouping, including top producers Saudi Arabia and Russia, said it had agreed to raise output by 400,000 barrels per day in February, the same level as in previous months.
Amid broader hopes that the Omicron variant won't derail the global economic recovery, miners were amongst the best performers in London on Wednesday. Anglo American shares closed up 2.8%, BHP Group up 2.1% and Rio Tinto up 2.0%.
Also ending higher were banks such as Lloyds Banking Group, up 1.5%, and NatWest, up 1.1%.
Pandemic recovery trades were also abound in the mid-cap FTSE 250 index, with Cineworld shares soaring 19%.
Hopes have grown that England will avoid further coronavirus restrictions despite infections surging.
UK Prime Minister Boris Johnson will face scrutiny over his hope to "ride out" the wave of Omicron without further restrictions despite the NHS coming under significant strain from coronavirus.
Johnson confirmed he would stick with the Plan B measures including work-from-home guidance, mask-wearing and Covid health passes ahead of Wednesday's review of the regulations scheduled to expire on January 26.
At a Downing Street press conference, he argued the booster roll-out has given substantial protection and added: "So together with the Plan B measures that we introduced before Christmas we have a chance to ride out this Omicron wave without shutting down our country once again."
Meanwhile, in Parliament, Johnson announced changes to Covid rules for travel to England, scrapping the need for pre-departure tests and quarantine on arrival until the traveller has tested negative.
"I can announce that in England from 0400 GMT on Friday we will be scrapping the pre-departure test, which discourages many from travelling for fear of being trapped overseas and incurring significant extra expense," Johnson told lawmakers.
Ocado topped the FTSE 100, rising 3.2%, after Berenberg raised the online grocer to Buy from Hold.
Further, data from Kantar showed Ocado was the only major player to show a year-on-year sales increase in the 12-week period leading up to Boxing Day, up 2.5% to GBP544 million. Ocado's share of the market inched up to 1.7% from 1.6%.
Elsewhere in London, ad agency M&C Saatchi leapt 13% after a London-listed acquisition company confirmed it had bought a 9.8% stake.
AdvancedAdvT a London Main Market-listed acquisition vehicle, said it bought 12.0 million M&C Saatchi shares for GBP2.00 each, making the total value of the deal GBP24.0 million. AdvancedAdvT said it viewed the acquisition of the shareholding in the London-based advertising agency as a "good investment opportunity".
Shares in AdvancedAdvT closed down 1.8%.
The UK corporate calendar on Thursday has trading statements from clothing and homewares retailer Next and baker Greggs. Ten Entertainment releases full-year results.
The international economic calendar has a services PMI from China overnight and German factory orders at 0700 GMT followed by inflation at 1300 GMT. Eurozone producer prices are at 1000 GMT and US initial jobless claims are due at 1330 GMT followed by the ISM's services PMI at 1500 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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