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(Alliance News) - Travel companies led London-listed equities to a positive start to 2022, as global markets kick off the new year in optimistic fashion.
The FTSE 100 index was up 80.89 points, or 1.1%, at 7,465.43 early Tuesday. The mid-cap FTSE 250 index was up 328.26 points, or 1.4%, at 23,809.07. The AIM All-Share index was up 5.33 points, or 0.4%, at 1,222.24.
The Cboe UK 100 index was up 1.2% at 740.91. The Cboe 250 was up 1.4% at 21,211.01, and the Cboe Small Companies up 0.4% at 15,379.25.
In Paris the CAC 40 was up 0.5%, while the DAX 40 in Frankfurt was 0.1% higher.
"New Year optimism fed through to a jaunty January start for markets, as investors accentuated the positives," Interactive Investor analyst Richard Hunter commented.
"Despite continually rising cases of Omicron, there is a growing belief that the variant is less deadly if more transmissible, particularly when coming up against the wall of triple-jabbed individuals."
Travel and leisure stocks were the beneficiaries of receding Omicron-related fears.
British Airways-parent International Consolidated Airlines Group topped London's FTSE 100 index of large-caps, kicking off the new year with a 9.6% share price lift off in early dealings.
Jet engine maker Rolls-Royce, which also has an exposure to the travel sector, rose 3.3%. In addition, the company announced it has sealed the sale of its Bergen unit.
Among mid-caps, cruise ship firm Carnival rose 8.4%, budget airline easyJet added 7.2%, and Wizz Air climbed 9.1%.
Wizz Air said it carried 2.6 million passengers in December, a near four-fold rise from 665,722 a year earlier. The load factor improved to 75.4% from 56.1%.
Wizz raised its capacity to 3.5 million seats in December from 1.2 million a year prior. This meant that for the whole of 2021, capacity was increased by 30% to 28.9 million, in step with passengers numbers, which grew at the same rate to 21.7 million.
The rally in London's travel sector followed similar climbs in New York on Monday.
Avatrade analyst Naeem Aslam commented: "Monday's session proved to be positive for airlines and cruise companies, which had been hit hard by the pandemic starting in 2021 when countries started implementing strict restrictions on social interaction and travel to help curb the spread of the coronavirus."
Elsewhere in London, Mitchells & Butlers added 3.0%, pub chain Fuller, Smith & Turner rallied 6.5% and Gym Group climbed 3.9%, as Covid-19-related optimism also fed through to the wider leisure sector.
Casual dining restaurant chain Tasty, in an early reading of Omicron's impact on the hospitality sector, said trading in the key month of December was "disappointing". Its stock rose 6.3%, however, as investors bet its fortunes will improve as Omicron's impact wanes.
AIM-listed Tasty said its crucial Christmas trading period was hurt by the emergence of the Omicron variant in the UK. Tasty operates the dim t and Wildwood casual restaurant chains.
December, usually its strongest month, suffered "disappointing" trading as infection rates rose and the UK government reinstated working from home advice.
There were "significantly reduced" numbers of those eating out as a result, while Christmas booking were also hit.
"As a consequence, trading for the peak December trading period was considerably weaker than anticipated," Tasty said, though it noted that 50 our of its 54 restaurants remain open.
"2022 will not be without its challenges as the company prepares for the end of government support, in terms of reduced VAT and business rates. However, it is confident in its brands and optimistic about the trading potential of the group, especially with the strong revenue stream provided by takeaway and delivery services," Tasty said.
The dollar was mostly higher early Tuesday in London, though it surrendered earlier gains against the pound.
Sterling was quoted at USD1.3486, up slightly from USD1.3482 at the early London equities close on Friday. The euro stood at USD1.1293, down from USD1.1327. Against the yen, the dollar rose to JPY115.78, from JPY115.10.
A barrel of Brent oil fetched USD79.06 early Tuesday, up from USD78.32 midday Friday. Gold fell to USD1,806.30 an ounce from USD1,819.10.
In Tokyo, the Nikkei 225 advanced 1.8% on Tuesday, and in Sydney, the S&P/ASX 200 added 2.0%. Markets in China were less positive. The Shanghai Composite ended down 0.2%, while the Hang Seng in Hong Kong inched up 0.1% higher after a late rally.
Survey results on Tuesday showed China's manufacturing sector returned to growth in December.
The latest Caixin manufacturing purchasing managers' index advanced to 50.9 points in December from 49.9 in November. December's figure was above the 50.0 neutral mark.
"Though marginal, the rate of improvement was the strongest seen since June," IHS Markit said.
Analysts at ING added: "The Caixin manufacturing PMI confirmed the expansion of activity shown by the official PMI a few days back. This follows a turn in policy direction from aggressive reform to stabilisation. We shall see more growth from various industries in 2022 with a highlight being green objectives."
Manufacturing PMI readings for Japan and Australia were slightly less positive for last month. Japan's slipped to 54.3 points in December from 54.5 in November, while Australia's moved down to 57.7 from 59.2.
The UK's manufacturing PMI is released at 0930 GMT.
By Eric Cunha; ericcunha@alliancenews.com
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