A 0.6% rise in the FTSE 100 on Friday means the UK index has now suffered less than a 2% decline since the eve of the big sell-off on 26 November, which was triggered by shocking headlines declaring Omicron to be the worst ever Covid-19 variant
Russ Mould, investment director at AJ Bell, said: “Under the circumstances, the movement in the index could have been a lot worse given the events of the past week.
“We’ve seen Covid rates shoot up, governments reintroduce travel restrictions, the return of masks in shops and public transport, the boss of a leading drug company saying existing vaccines may not be as effective against Omicron, and the head of the US central bank imply that interest rates may go up sooner than expected to combat inflation.
“Investors certainly don’t seem to be in panic mode, with many people happy to buy on the dips.
“A week ago, the travel sector had a big shock as the new variant struck, causing some stocks including International Consolidated Airlines to slump on the market. Fast forward to the present and the British Airways is at the top of the FTSE 100 leaderboard, rising 3%.
“The market has been following a similar pattern since Omicron emerged, namely on down days investors dumped economically sensitive stocks in the commodities, banking and travel space. On up days, these sectors were in demand. However, today we’ve seen the trend fall apart. Oil producers are rising, miners are weak, and banks are flat.”