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(Alliance News) - Stock prices in London were higher at midday on Wednesday as investors brushed off fears over the Omicron variant of Covid-19, while Germany ushered in a new era as Angela Merkel departed as chancellor.
Pfizer said lab studies showed that three doses of its Covid vaccine is effective against Omicron.
The FTSE 100 was up 21.53 points, or 0.3%, at 7,361.43. The mid-cap FTSE 250 index was up 68.88 points, or 0.3%, at 23,307.05. The AIM All-Share index was up 2.29 points, or 0.2%, at 1,202.34.
The Cboe UK 100 index was down 0.1% at 727.16. The Cboe 250 was flat at 20,691.84, and the Cboe Small Companies was down 0.1% at 15,013.48.
In mainland Europe, the CAC 40 stock index in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 0.5%.
"The headlong rally in global markets has stalled, but the overall outlook for equities remains firmly positive. The previous three sessions put markets firmly back on the front foot, with Omicron concerns almost entirely evaporating," said IG Group analyst Chris Beauchamp.
In Berlin, the German parliament elected Olaf Scholz as chancellor on Wednesday, turning the page on 16 years with Merkel at the helm as a new centre-left-led coalition takes the wheel of Europe's top economy. Scholz, who won 395 of the 707 votes cast in the Bundestag lower house, has pledged broad "continuity" with the popular Merkel while making Germany greener and fairer.
In the FTSE 100, Berkeley Group was the best performer, up 3.5%. The housebuilder credited its willingness to take on "large-scale, complex" sites in London and the south east of England for a strong rise in interim earnings.
For the six months to October 31, revenue rose 36% to GBP1.22 billion from GBP895.9 million last year, and pretax profit increased 26% to GBP290.7 million from GBP230.8 million.
Looking ahead, Berkeley raised its earnings expectation for the current financial year by 5% from the current guidance, which was for pretax profit to be at a similar level to last financial year of GBP518.1 million.
Further, as a result of a resilient sales market, its delivery pipeline and the recovery of sales to pre-pandemic levels, Berkeley said pretax profit growth is expected to be around 5% per annum for the next three financial years. This sees Berkeley on a path to delivering GBP625 million of pretax profit for the year ending April 30, 2025, it said.
Large-cap peers, Barratt Developments and Persimmon were up 0.9% and 1.2% respectively in a positive read-across.
Taylor Wimpey was down 0.1%. The housebuilder said Chief Executive Officer Pete Redfern will step down from the role after 14 years and will leave once a suitable candidate has been identified and a full handover has taken place. Taylor Wimpey said it has a succession plan in place and the recruitment process is advanced, with a selection process considering both internal and external candidates.
Croda International was up 3.4% after UBS upgraded the speciality chemicals company to Buy from Neutral.
Ocado Group was up 3.2% after Jefferies raised the online grocer to Hold from Underperform.
Sage Group was up 1.2% after Morgan Stanley raised the accounting software provider to Overweight from Equal Weight.
In the FTSE 250, Trustpilot was up 4.5% after Morgan Stanley upgraded the online review site to Overweight from Equal Weight.
Conversely, Tui was among the worst mid-cap performers, down 4.5%, after the travel operator warned trading could deteriorate due to new travel restrictions caused by the Omicron variant.
The Hanover, Germany-based firm slashed its pretax loss for the year that ended September 30 to EUR2.46 billion from EUR3.20 billion the previous year. Revenue was EUR4.73 billion, down 40% from EUR7.94 billion in the prior year that was partially before the pandemic.
Less positively, increased media coverage of rising Covid-19 incident rates and the emergence of the new Omicron variant has weakened sales momentum, particularly for Winter 2021-22, Tui said. Winter bookings are currently just 62% of the pre-pandemic 2018-19 season.
Looking ahead, Tui said it cannot provide financial guidance for financial 2022, blaming difficulties in predicting the pandemic's impact on travel. However, Tui said it has an "encouraging pipeline" of 2.2 million bookings for the Summer 2022 holiday season.
Tui's warning sent fellow travel stocks lower. Midcap airline Wizz Air was down 5.6%, while British Airways-parent International Consolidated Airlines was the worst blue-chip performer, down 4.2%. AIM-listed Jet2 was off 5.6%.
The pound was quoted at USD1.3202 at midday on Wednesday, down from USD1.3224 at the London equities close Tuesday.
In political news, UK Prime Minister Boris Johnson has ordered an investigation into claims Downing Street staff broke lockdown rules by holding a Christmas party last year and told MPs he was "furious" about footage apparently showing aides joking about it.
Johnson apologised "unreservedly" for the offence caused by the footage of his then-spokeswoman Allegra Stratton at a mock press conference. But he insisted that he had been repeatedly assured that "there was no party and that no Covid rules were broken".
The euro was priced at USD1.1287, higher against USD1.1241. Against the Japanese yen, the dollar was trading at JPY113.42, down from JPY113.58.
Brent oil was quoted at USD74.70 a barrel Wednesday midday, soft from USD74.74 late on Tuesday. Gold stood at USD1,789.20 an ounce, firm against USD1,785.50.
US stock market futures were pointed mostly higher on hopes that Omicron variant of Covid-19 will prove less damaging to the economy than feared.
The Dow Jones Industrial Average was called down 0.1%, but the S&P 500 was pointed up 0.1% and the Nasdaq Composite up 0.4%.
Pfizer shares were up 1.3% in the New York pre-market, having added 0.5% on Tuesday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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