FTSE 100 flips, then slips; Wall Street turns directionless at open

US Markets: Wall Street started on a muted note on Wednesday, 8 December, as the leading stock averages took a breather from the back-to-back sessions of sharp up moves with the wider share barometer S&P 500 nearing the record highs, Dow Industrials and Nasdaq Composite advancing 3-4%.

Even with the diminished worries around the Omicron variant of the Covid-19, the markets are likely to remain volatile as anticipated earlier, as the healthcare authorities, the respective governments, alongside the vaccine makers continue to assess the prospective repercussions of the Omicron variant.

The upended trading activity clearly exhibits partial profit booking as equity indices inch closer to their respective all-time highs. The expectations of higher consumer spending during the busiest trading period of the year with the people, as well as businesses preparing for the Christmas festivities and the year-ender holidays, the markets are highly likely to mount fresh peaks in the remainder of 2021.

Multiple sessions of value buying are likely to be seen in the terminal weeks of the current month as market participants would accumulate the shares before the commencement of the Q4 and full year corporate earnings season. Even with the widespread emergence of Omicron variant, the October-December quarter of 2021 remains the best three-month period for a large section of businesses that were looking forward to realising an earnings closer to the pre-Covid levels.

Following the arrival of the Omicron variant, certain countries have reimposed mini lockdowns, while some have reintroduced the mask mandates, alongside a slew of pandemic restrictions. In the meantime, a bunch of leading economies are contemplating the possibilities for reintroducing other precautionary guidelines as the scope of coronavirus continues to evolve with the eruption of multiple variants with different transmissibility and level of severity when it comes to the post-illness symptoms.

The upbeat jobs data partly helped in resurrecting the optimism with the number of job openings in the United States saw an appreciation of 431,000 on a sequential basis to 11.033 million in the month of October following the sharp addition coming from sizable increases in accommodation and food businesses.

According to the data publicised by the US Bureau of Labor Statistics, non-durable goods manufacturing businesses and educational services settings effectively complemented the rise in job openings, whereas the largest dips were seen in transport, warehousing, and utilities, followed by finance and insurance, arts, entertainment, and recreation commercial setups.

As the trading progressed, all the three indices turned red, however the losses were capped below 0.10%. The Dow Jones Industrial Average slipped 33.82 points, or 0.10% to 35,685.61, the technology leader Nasdaq Composite dropped 2.59 points, or 0.02% to 15,684.33, whereas the broader share barometer S&P 500 shed 4.35 points, or 0.09% to 4,682.40.

US Market News: Shares of American Express, Apple, IBM, Boeing, Walt Disney and McDonald’s managed an upsurge of more than 1%, positively backing the 30-share average on Wednesday, while the blue-chip stocks of Intel, JPMorgan Chase, Honeywell Corporations and Cisco Systems declined over 1%, effectively counterbalancing the positive points provided by the aforementioned shares.

Amid the Nasdaq components, shares of Facebook, Match Group and Peloton Interactive gained 2-4%, followed by the over 1% rises in the stocks of MercadoLibre, Skyworks Solutions, JD.com, Bookings Holdings, Cerner, PayPal, Dexcom, Align Technology, Synopsys, Marvell Technology, Xcel Energy and Twenty-First Century Fox.

On the other hand, shares of NXP Semiconductors, Pinduoduo, Trip.com Group, Microchip Technology, Kraft Heinz, Charter Communications, Texas Instruments, Zoom Video Communications, Lululemon Athletica, Moderna, Nvidia, T-Mobile US, Honeywell International, Intel, Mondelez International, Cisco Systems, CSX, Splunk, Avago Technologies, NetEase, Costco Wholesale, Qualcomm, Tesla and Analog Devices plunged 1-6%.

The cumulative negative points managed to counterbalance the effective upsurge as the market index hovers largely unchanged with the investors turning their focus to the inflation numbers with China reporting the data on Thursday and the US announcing the rate of inflation on Friday, 10 December.

UK Markets: London equities traded largely unchanged in the negative territory in the terminal deals on Wednesday as markets witnessed a topsy-turvy session after a consecutive rally for two days in which the headline FTSE 100 managed to amass a gain of a little more than 3%. The alleviating fears of the Omicron variant has helped the investors to allay the fears as the Omicron-related infection remains mild as against the expectations of severe consequences.

However, the chances of any fresh restrictions to contain the spread of virus in the country can effectively put a break on the paddle steering the national economic recovery. After staging a recovery of over 0.50% in the mid-morning deals, FTSE 100 continued to decline in the second half of the day.

Shares of AstraZeneca and Unilever managed a marginal upsurge, while the stocks of HSBC Holdings, Rio Tinto and BHP Group lost around 1%. Shares of Berkeley Group Holdings emerged as the biggest gainers among the 101 components, while the stock of Darktrace shed more than 4%, being the biggest loser during the day.

The domestic benchmark index FTSE 100 added 4.71 points, or 0.06% to 7,344.61, after oscillating between a intraday high and low of 7,378.92 and 7,333.56, while the mid-cap reflector FTSE 250 lost 5.29 points, or 0.02% to 23,232.88.

FTSE 100 (8 December)

Source: REFINITIV

Market Snapshot

Top 3 volume leaders: Lloyds Banking Group, Vodafone Group and International Consolidated Airlines Group

Top 3 sectoral indices: Automotive, Telecommunications, and Household Goods

Bottom 3 sectoral indices: Medical Services, Personal Goods, and Beverages

Crude oil prices: Brent crude down 0.17% at $75.31/barrel; US WTI crude down 0.21% at $71.90/barrel

Gold prices: An ounce of gold traded at $1,782.15, down 0.14%

Exchange rate: GBP vs USD - 1.3216, down 0.19% | GBP vs EUR - 1.1660, down 0.77%

Bond yields: US 10-Year Treasury yield - 1.526% | UK 10-Year Government Bond yield - 0.7650%

Markets @ 16:15 GM

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