(Alliance News) - Stocks in London outshone European peers on Wednesday morning as investors returned from a Christmas break in a positive mood despite the surging Omicron cases, both domestically and abroad.
"Investors are still monitoring the Omicron situation closely which has led to regional and national lockdowns around the globe. The optimism is that we are not going to see these restrictions staying in place for an extended period of time," AvaTrade Chief Market Analyst Naeem Aslam said.
"Supply chain issues are already profound and no one wants to see them becoming more worse as it will hurt economic growth in the US and rest of the world."
The FTSE 100 index was up 68.74 points, or 0.9%, at 7,440.84 early Wednesday. The mid-cap FTSE 250 index was up 310.14 points, or 1.3%, at 23,580.57. The AIM All-Share index was 0.4% higher at 1,203.04.
The Cboe UK 100 index was up 0.7% at 738.47. The Cboe 250 was 1.3% higher at 20,976.00. The Cboe Small Companies was up 0.4% at 15,197.29.
In mainland Europe, the CAC 40 stock index in Paris was marginally higher and the DAX 40 in Frankfurt was down 0.2%.
Like in the US and Asia, markets in most of Europe have been trading since Monday, while London was reopening for the first time since Friday.
In the UK, the National Health Service is mounting a fresh drive to get Covid booster jabs into arms to protect against the fast-spreading Omicron variant.
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".
The move comes as ministers continue to monitor the latest data with England and Wales recording a record 129,471 confirmed cases on Tuesday, while separate figures for Scotland showed another 9,360 cases. No data was available for Northern Ireland.
The government at Westminster has said while the early evidence suggests Omicron is less likely to cause serious illness than earlier waves it stands ready to impose new measures in England if necessary.
Currently England is alone among the home nations in ruling out additional controls before the new year, with Scotland, Wales and Northern Ireland all having put in place further controls since Christmas.
On the London Stock Exchange, Anglo American was among the worst performers in the FTSE 100, down 0.6%. It confirmed it has entered talks with Brazilian mining peer Vale over the potential to jointly develop the Serpentina iron ore resource.
Anglo noted that Vale's Serpentina is contiguous to its Minas-Rio iron ore operation in Brazil.
"These discussions are preliminary in nature and there can be no certainty that any agreement will be reached or, if any agreement is reached, on the terms or scope of any such agreement," Anglo added.
In its own release, Vale also confirmed the discussions. The company was responding to a letter from the Securities & Exchange Commission of Brazil, following a media report by Bloomberg on Thursday last week. It said there was no decision or agreement on the acquisition of a stake in Minas-Rio.
Blue-chip peers were flat to lower. Rio Tinto lost 0.7%, Polymetal was down 0.5%, and Antofagasta was flat.
Fresnillo eased 0.7% as its 44%-owned Juanicipio project continues to face delays.
The Mexican state-owned electricity utility, Comision Federal de Electricidad, has told Fresnillo that approval to complete the tie-in to the national power grid cannot yet be granted and the mill commissioning timeline will therefore be extended by approximately six months.
"This is directly related to knock-on effects of the pandemic on the CFE's operations, predominantly related to a lack of CFE staff which limits its ability to oversee three key tasks to: review the existing installation; supervise physical connection to the active power grid; and approve required blackout prevention devices," Fresnillo explained.
The miner said it will "do all that it can to expedite these necessary approvals". Full load commissioning activities are now expected to be approved sometime after the first week of May 2022.
Pharmaceutical stock AstraZeneca was 0.6% higher.
Astra agreed to a global development and commercialisation agreement with California-headquartered Ionis Pharmaceuticals for eplontersen, formerly known as Ionis-TTR-LRX.
The drug helps to treat TTR amyloidosis by reducing the production of transthyretin, or TTR protein.
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 jumped 41%.
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".
Brent oil was quoted at USD79.14 a barrel Wednesday morning, up from USD76.00 at Friday's equities close in London.
AvaTrade's Aslam said: "Oil prices have been rising over the past few days, mainly because of falling concerns regarding the severity of the Omicron variant and its impact on economies around the world. The US announcing that it is not considering raising restrictions in the last few days of 2021, a stance taken by France and Britain as well, has pumped investors' optimism and led to the oil market recovering from the slump in prices seen around the time when news of the Omicron variant reached markets."
The OPEC+ group of oil producers holds a video meeting on Tuesday next week to discuss its production cuts.
Gold stood at USD1,803.20 early Wednesday, soft from USD1,808.50 late Friday in London.
The pound was quoted at USD1.3413 early Wednesday, marginally soft on USD1.3416 at the London equities close last Friday.
The euro was priced at USD1.1286, down from USD1.1330 on Friday. Against the yen, the dollar was trading at JPY114.94, rising from JPY114.38.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.6%. In China, the Shanghai Composite ended 0.9% lower, while the Hang Seng index in Hong Kong lost 0.8%.
Sydney reopened for the first time since Christmas Eve, and the S&P/ASX 200 closed 1.2% higher.
By Paul McGowan; paulmcgowan@alliancenews.com
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