Omicron fears ease to send airline shares skywards

Concerns that the Omicron variant of Covid-19 could lead to further global shutdowns and restrictions appeared to ease among traders on Monday.

Reports suggesting the new strain may only lead to mild symptoms and lessen the impact on the economy sent shares in travel firms and airlines soaring after a week of selloffs.

As a result, the FTSE 100 closed the day up 109.96 points, or 1.54%, at 7232.28.

In Europe, there was equally high levels of optimism with the German Dax closing up 1.39% and the French Cac up 1.48%.

Michael Hewson, chief market analyst at CMC Markets UK, said: “The biggest beneficiaries are in travel and leisure with British Airways owner IAG shrugging off the tighter rules around testing and quarantine, on reports that the EU could consider easing Omicron travel restrictions to South Africa in the next week or so.”

IAG topped the biggest risers list, with shares soaring 8.1%, up 10.64p at 132.34p. There was also growth for aircraft engine maker Rolls-Royce up 4.8p at 129.7p; Intercontinental Hotels up 157p at 4,701p; Premier Inn owner Whitbread up 93p at 2,976p and EasyJet up 27.8p at 556p.

Elsewhere, leisure firms also enjoyed a boost as bosses hoped the Omicron fears might be allayed and bring customers back to pubs and bars in the all-important Christmas party season.

Wetherspoons, Mitchells & Butler and the Restaurant Group all enjoyed rising shares – up 6.1%, 6.6% and 8.4% respectively.

The currency market had a quiet day with the pound up 0.13% against the dollar at 1.325 and up 0.06% against the euro at 1.175.

In company news, the owners of pizza chain Franco Manca said sites have been trading ahead of expectations.

Fulham Shore said revenues in the six months to the end of September doubled compared to a year ago to £39.5 million. Shares were flat at 16.75p.

Marshal Motors said it will accept a takeover bid of £325 million from Constellation Automotive – the owners of WeBuyAnyCar.

Ted Baker announced its chairman, John Barton, had died at the age of 77 following an illness. He had previously led the boards of easyJet and Next. Shares closed up 6p at 114.7p.

Irn Bru owner AG Barr announced plans to expand into plant-based milk after buying a 60% stake in oat milk and porridge brand Moma Foods with the option to buy the remaining stake within three years. Shares closed up 3p at 523p.

And the London Stock Exchange Group agreed to buy Quantile Group – which serves banks, hedge funds and other financial institutions – in a cash deal worth up to £274 million. Shares in LSEG closed up 66p at 6,590p.

The biggest risers on the FTSE 100 were IAG, up 10.64p at 142.34p; Flutter Entertainment, up 595p at 10,625p; Melrose, up 6.4p at 150.6p; Rolls-Royce, up 4.8p at 129.7; and Burberry, up 66.5p at 1,832.

The biggest fallers on the FTSE 100 were Ocado, down 44.5p at 1,582p; Darktrace, down 10.6p at 416.2p; Polymetal, down 22.5p at 1,332.5p; Persimmon, down 35p at 2,771p; and Scottish Mortgage Investment Trust, down 11.5p at 1,385p.