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(Alliance News) - Stocks in London were enjoying a strong session on Wednesday on optimism the Omicron variant of Covid-19 is not as deadly as the Delta variant, allowing governments to steer clear of re-introducing harsh lockdowns.
The FTSE 100 index was up 63.30 points, or 0.9%, at 7,435.40 midday Wednesday. The mid-cap FTSE 250 index was up 292.39 points, or 1.3%, at 23,562.82. The AIM All-Share index was 0.5% higher at 1,204.60.
The Cboe UK 100 index was up 0.7% at 737.99. The Cboe 250 was 1.3% higher at 20,972.09. The Cboe Small Companies was up 0.4% at 15,203.57.
In mainland Europe, the CAC 40 stock index in Paris was marginally lower and the DAX 40 in Frankfurt was down 0.4%.
US stock index futures were pointed to a muted open during a week of low trading volumes and light news flow. The Dow Jones Industrial Average and S&P 500 were both indicated 0.1% higher, while the Nasdaq Composite was called up 0.2%.
London was catching up to Asian, European and US markets, which opened earlier in the week and have seen their rallies run out of steam.
"Investors should note that in the coming months, how nations respond to the ever rising number of coronavirus cases is likely to be the main driver for volatility in stock markets. The US has reported more than 4.1 million Covid-19 cases in December, which is much higher than last month's 2.54 million cases. The cases reported over the last seven days have amounted to 231,888, which is thrice the average seen on November 27," AvaTrade Chief Market Analyst Naeem Aslam said.
"Despite the surge in cases, the Centers for Disease Control has cut down its recommended isolation period from 10 days to 5 days for patients who do not seem to be exhibiting Covid-19 symptoms. Moreover, another development on this front is that research from South Africa shows that infections from the new strain can actually improve immunity of patients against the Delta variant."
To improve those odds, the UK's National Health Service is mounting a fresh drive to get Covid booster jabs into arms. The NHS vaccination programme is sending around 650,000 text messages and 50,000 letters to people who have not yet received their top-up dose, encouraging them to roll up their sleeve and have a "jabby new year".
"This month has proven to be exceptionally mind-boggling for stock traders as conflicting news regarding faster tapering by the Fed and the emergence of the Omicron variant spooked investors into triggering a massive sell off. Stock traders were completely baffled as to how reduced market support at a time when Covid-19 cases were on the rise would affect the stock market's future outlook," AvaTrade's Aslam continued.
"However, stock markets have been able to recover their losses and are on track to reach all-time highs since then. However, as market dynamics shift, investors' strategies are shifting away from speculative and high-growth stocks, toward stocks that are more closely linked to economic growth. This phenomenon may help explain why technology stocks and cryptocurrencies have struggled in recent weeks."
On the London Stock Exchange, Fresnillo shares lost 1.6%. The miner's 56%-owned Juanicipio silver project faces delays, but analysts at Berenberg commented that the delay will not hurt the project's value.
Mexican state-owned electricity utility, Comision Federal de Electricidad told Fresnillo that approval to complete the tie-in to the national power grid cannot yet be granted, meaning that the mill commissioning timeline will need to be extended by six months.
Fresnillo blamed a lack of staff at the utility as Covid cases continue to rise in Mexico and said it will "do all that it can to expedite these necessary approvals".
Berenberg expects a hit to Fresnillo's share price, but feels this should "not affect the long-term value of Juanicipio," a "key asset" for Fresnillo.
The remaining 44% of the project is owned by Canada-based development and exploration firm MAG Silver Corp.
Pharmaceutical stock AstraZeneca was 1.0% higher.
Astra agreed to a global development and commercialisation agreement with California-headquartered Ionis Pharmaceuticals for eplontersen, formerly known as Ionis-TTR-LRX.
The two pharma firms will jointly develop and commercialise eplontersen in the US, while Astra will develop and commercialise it in the rest of the world, except in Latin America.
As part of the deal, Astra will pay an upfront fee of USD200 million, and will make additional conditional payments of up to USD485 million upon regulatory approvals.
After that, Astra will pay up to USD2.9 billion of sales-related milestones based on sales thresholds between USD500 million and USD6 billion, plus royalties in the range of low double-digit to mid-twenties percentage depending on the region.
On AIM, shares in Cadence Minerals were up 28% at midday, having added more than 40% earlier in the session.
Cadence said it has entered into a binding settlement agreement with the secured bank creditors of Dev Mineracao, the owner of the Amapa iron ore project in Brazil.
The agreement is the last major precondition for Cadence to vest its initial USD2.5 million for 20% of the large-scale Amapa iron ore mine, beneficiation plant, railway and private port.
As a result, Cadence and Indo Sino's joint venture have now secured 100% ownership of Amapa. Cadence has already begun work on the next investment phase to earn an additional 7% of Amapa for USD3.5 million.
Chief Executive Kiran Morzaria said the deal would represent its "greatest achievement to date as a mining investment company".
Iofina added 13% after it said it will meet its crystalline iodine production target of 260 to 275 metric tonnes of crystalline iodine for the second half of the 2021, as strong demand continues.
Also in Iofina's favour, iodine spot price have increased 25% to USD50 per kilogram since its third quarter update in October.
Iofina said it expects the current pricing levels to be maintained into the first half of 2021 due to "robust" market trends.
Brent oil was quoted at USD78.69 a barrel Wednesday midday, up from USD76.00 at Friday's equities close in London.
Gold stood at USD1,796.00 midday Wednesday, soft from USD1,808.50 late Friday in London.
The pound was quoted at USD1.3435 midday Wednesday, firm on USD1.3416 at the London equities close on Christmas Eve.
The euro was priced at USD1.1301, down from USD1.1330 on Friday. Against the yen, the dollar was trading at JPY114.92, rising from JPY114.38.
By Paul McGowan; paulmcgowan@alliancenews.com
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