The FTSE 100 continues to tick higher but its momentum has been checked slightly by the reintroduction of restrictions in the UK which suggest the market’s more relaxed attitude to the Omicron variant might be somewhat premature.
AJ Bell investment director Russ Mould said: “The modest gains for the index on Thursday morning could largely be attributed to the weakness in the pound – trading at 12 month lows against the dollar amid concerns around the fate of the UK economy. A drop in sterling flatters the overseas earnings which dominate the FTSE 100.
“News that a booster shot of the Pfizer/BioNTech vaccine gives decent protection against the new Covid strain helped lift US markets overnight, however this sets up a race to get jabs into arms before even more onerous restrictions are seen as being required to protect healthcare systems.
“News of tighter UK restrictions understandably overshadowed the latest trading update from aircraft engine maker Rolls-Royce given its reliance on the aviation sector with British Airways owner International Consolidated Airlines also under pressure. Hospitality stocks suffered early on too.
“If we’re spending more time indoors and ordering stuff online then that has benefits for packaging firm DS Smith which was the top FTSE 100 riser as first half results suggested it is also doing a good job of managing rising input costs.”