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(Alliance News) - Stock prices in London traded solidly higher in early dealings on Tuesday, shaking off declines overnight in Asia and New York as markets face virus worries and central bank trepidation.
The FTSE 100 index was up 37.33 points, or 0.5%, at 7,268.77 early Tuesday. The mid-cap FTSE 250 index was up 116.83 points, or 0.5%, at 22,764.05. The AIM All-Share index was up 1.62 points, 0.1%, at 1,179.10.
The Cboe UK 100 index was up 0.5% at 721.13. The Cboe 250 was 0.4% higher at 20,133.62, but the Cboe Small Companies was down 0.1% at 14,799.77.
In mainland Europe, the CAC 40 stock index in Paris was up 0.5%, while the DAX 40 in Frankfurt was 0.4% higher.
In Asia on Tuesday, the Nikkei 225 in Tokyo fell 0.7%. The Shanghai Composite closed 0.5% lower, while the Hang Seng in Hong Kong fell 1.3%. The S&P/ASX 200 in Sydney closed marginally lower.
China's economically important Zhejiang province wrestled on Tuesday with a Covid outbreak that has left half a million people quarantined and some districts under business shutdown.
Zhejiang, a major industrial and export hub on the country's east coast, reported 44 of China's 51 domestically transmitted coronavirus cases on Tuesday, bringing the total since late last week to nearly 200.
Although Chinese case counts are miniscule compared to other major economies, officials in Zhejiang have employed the country's signature mass testing blitz and targeted lockdowns with concern high over fresh outbreaks as Beijing gears up to host the Winter Olympics in February.
More than 540,000 people have been put in quarantine in Zhejiang, officials have said.
"Asian equity markets are down this morning following declines yesterday in Europe and the US. Concerns about China's property market have been cited as one reason for the fall, while the potential impact of Omicron remains a key uncertainty," analysts at Lloyds Bank commented.
The dollar was stronger early Tuesday.
The pound was quoted at USD1.3210 early Tuesday in London, down from USD1.3230 late Monday. The euro stood at USD1.1282, flat versus USD1.1283. Against the yen, the dollar was trading at JPY113.69, up from JPY113.50.
The UK unemployment rate edged lower in October, data showed on Tuesday, edging closer to pre-virus levels.
Figures from the Office for National Statistics showed the UK unemployment rate was reduced to 4.2% in the three months to October, having sat at 4.3% in September. The October figure came in line with market consensus cited by FXStreet.
The UK jobless rate is now just 0.2 percentage point higher than it was before the pandemic.
October's labour force survey came shortly after the end of the UK's furlough scheme on September 30, the ONS noted.
"The Bank of England's fears of a post-furlough redundancy spike completely failed to materialise," Hargreaves Lansdown analyst Sarah Coles commented.
"This gives the Bank of England a completely different and equally painful headache. On the one hand, it left rates untouched last month, specifically because it was concerned about the risk of unemployment. These fears have been allayed, and in the interim inflation has hit 4.2% and wage inflation is still running well above 4%.
"But on the other hand, a month is a long time during a pandemic and disappointing growth figures, combined with growing fears of Omicron running rampant, means it now has to worry about the fact that the fragile economy may not withstand a rate rise."
In London, Ocado shares rose 3.7%, the best large-cap performer in early trade.
A US International Trade Commission patent case verdict, delivered on Monday, "has found in favour of Ocado", the company said.
The dispute was with Norwegian firm Autostore. In October of last year, Autostore had said it sued and already filed complaints in the US and the UK. Autostore accused Ocado's Smart Platform of infringing Autostore's patented technology.
A judge found that three of four Autostore patents are invalid, while a fourth has not been infringed. Ocado is pursuing separate patent claims of its own against Autostore.
On the trading front, Ocado Retail is braced for its "best-ever Christmas ahead".
In the fourth quarter ended November 28, retail revenue fell 3.9% annually to GBP547.8 million, though this was up 32% from 2019. Typical shopping baskets are getting smaller. While average orders per week increased 9% annually, order value fell 12%.
Ocado expects the M&S partnership's annual performance to be in line with guidance. For financial 2022, it expects revenue growth at the top of the pre-virus range of 10% to 15%.
M&S shares were up 0.1%.
BT shares fell 4.9%, the worst decliner among London blue-chips. Telecom tycoon Patrick Drahi's Altice lifted its stake in telecommunications firm BT to 18%, from 12% previously. Altice confirmed it has no plans to mount a takeover offer for BT.
Drahi said he holds BT's management in "high regard".
"We are pleased to take this opportunity to increase our shareholding in BT. Over recent months we have engaged constructively with the board and management of BT and look forward to continuing that dialogue," Drahi added.
In response, BT said: "The board and management of BT Group will continue to operate the business in the interest of all shareholders and remains focussed on the successful execution of its strategy and building on recent performance momentum."
Elsewhere in London, retailer Joules dropped 19%. It warned its performance during the crucial Black Friday trading period was "below expectations".
Joules said it was hurt by global supply chain issues, higher costs, stock delays and a labour shortages in its third-party operated distribution centre.
The AIM listing said revenue in the half ended November 28 was 35% higher annually at GBP128 million.
For the full-year, Joules expects annual pretax profit between GBP2.0 million and GBP2.5 million, which would down from GBP3.7 million in the previous financial year.
"Global supply chain challenges are expected to remain during at least the second half of the group's financial year and there is increased consumer uncertainty as a result of the emergence of the Omicron coronavirus variant," Joules warned.
A standout performer on AIM was Omega Diagnostics, up 8.0%. The medical diagnostics company said its technology partner Mologic has found its lateral flow test has the same "high accuracy" in detecting the new Omicron variant as it does other known strains of Covid-19.
Gold fetched USD1,782.99 an ounce early Tuesday, down from USD1,788.71 at the London equities close on Monday. Brent oil was quoted at USD74.81 a barrel, down from USD75.05.
Still to come on Tuesday is eurozone industrial production data at 1000 GMT and US producer prices at 1330 GMT.
By Eric Cunha; ericcunha@alliancenews.com
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