FTSE struggles with 7,200, Wall Street dips 2% as Omicron fears escalate

US Markets:
Extending the previous week’s loss on Monday, 20 December, the major Wall Street stock averages plunged nearly 2% as market participants continue to square off positions in technology shares, travel corporations and the stocks that remain highly vulnerable to the scope of pandemic and the extent of damage due to the Omicron variant of Covid-19 (SARS-CoV-2).

The fresh panic amidst the investors is quite evident as a bunch of European countries are contemplating the possibility of nation-wide lockdown, while some are staring at reimposing a slew of pandemic-induced restrictions in order to curb the rising rate of infection.

The situation has completely turned upside down as compared to the market environment a month earlier, when most of the businesses were looking forward to realising a considerable chunk of revenues with the anticipation of high consumer footfalls and subsequently higher spending during the Christmas festivities and the year-ender break.

The emergence of the Omicron variant has categorically unsettled most of the business settings with the consumer-facing services enterprises including the food and accommodation setups facing the intense of heat as consumers, as well as corporate clients continue to cancel the bookings as the Omicron variant continue to the override the immunity developed by completing the two-dose regimen of Covid-19 vaccine.

The new strain overturning the resistance against virus has effectively raised concerns over the prospective efficacy of vaccines as a large number of people infected with Omicron variant have duly received both the doses of vaccine. Of the total cases linked to the fresh variant, a few individuals have also received the booster dose.

The United States reporting more than 150,000 cases on Friday last week further escalated the fears with regard to the extent of destruction due to possible reintroduction of restrictions and mini lockdowns in various localities.

The growing concerns with regards to earlier-than-anticipated interest rate hike by the US Federal Reserve also weigh on markets as investors are increasingly shifting away from risky bets including the tech shares, as well crypto-assets, the so-called assets that were widely incorporated by institutional clients to offset the inflationary hurdles.

The Dow Jones Industrial Average dived as much as 620.88 points, or 1.76% to 34,744.56, after crashing to a multi-week bottom of 34,665.50, the tech leader Nasdaq Composite tripped 259.19 points, or 1.71% to 14,910.50, whereas the wider share stock indicator S&P 500 plunged 77.06 points, or 1.67% to 4,543.58.

US Market News:

Of the 30 heavyweight components of Dow Jones, only P&G shares managed to oscillate in the positive territory with a brief gain of 0.40%. On the other hand, shares of Apple, Home Depot, Cisco Systems, Chevron, IBM, Microsoft, Amgen, Walgreens Boots Alliance, 3M, UnitedHealth Group, Walt Disney, Salesforce.com, Visa, Dow, JPMorgan, Boeing, Intel, Honeywell International, Nike, American Express, Caterpillar, Travelers Companies, and Goldman Sachs collapsed 1-4%, dragging the blue-chip market index deeper into the red.

Amid the tech constituents of Nasdaq Composite, the shares of Dexcom, Tesla, Cognizant Technology, Ross Stores, NetEase, Fiserv, Moderna, Baidu, Lululemon, Trip.com Group, Booking Holdings, JD.com, Pinduoduo, Peloton Interactive tanked 3-10%.

UK Markets:

London equities partly recovered in the mid-morning dealings on Monday, taking most of the investors by surprise even as Wall Street indices dropped more than 2%. The domestic benchmark index FTSE 100 ended a little lower from 7,200, losing nearly 1% as heavyweight shares cracked. Among the 101 constituents of FTSE 100, shares of Rentokil Initial emerged as the lead gainers, with the stock rising over 6%, while the stocks of Antofagasta and Informa plunged more than 5%.

Shares of GlaxoSmithKline, HSBC Holdings, BP, Royal Dutch Shell, Rio Tinto and Glencore were the major losers with the blue-chip components falling 0.80-3.20%. The market index ended 71.89 points, or 0.99% to 7,198.03, the mid-cap heavy index finished in a largely similar manner with FTSE 250 sliding 230.50 points, or 1.01% to 22,549.88.

FTSE 100 (20 December)

Source: EODHD/Others

Market Snapshot

Top 3 volume leaders:, Vodafone Group, Lloyds Banking Group, and BP

Top 3 sectoral indices: Personal Care, Personal Goods, and Tobacco

Bottom 3 sectoral indices: Health Care and Related Services, Life Insurance, and Medical Services

Crude oil prices: Brent crude down 4.35% at $70.32/barrel; US WTI crude down 4.98% at $67.33/barrel

Gold prices: An ounce of gold traded at $1,794.85, down 0.56%

Exchange rate: GBP vs USD - 1.3211, down 0.23% | GBP vs EUR - 1.1711, down 0.59%

Bond yields: US 10-Year Treasury yield - 1.402% | UK 10-Year Government Bond yield - 0.7825%

Markets @ 16:50 GMT

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