Markets lifted by investor optimism and US jobs data

Tech boom leads Wall Street indices to record highs

A week-long rally in world stock markets showed few signs of abating on Thursday as investors looked beyond the Omicron Covid-19 variant, bolstering gains for stocks and oil, while the dollar slipped. Sentiment was supported by signs that despite coronavirus cases hitting record highs, governments were trying to limit the economic damage by relaxing rules on isolation rather than resorting to lockdowns.

Despite concerns, the view seems to be that the highly transmissible Omicron variant will be less lethal than feared, said Holger Schmieding, chief economist at Berenberg. "Markets are back trading the rebound story, the recovery story for 2022," Mr Schmieding said, noting higher bond yields reflected expectations of economic recovery and, subsequently, a reduced pace of central bank support.

DUBLIN

The Iseq All-Share Index rose 0.6 per cent to 8,488, to reach its highest level in more than six weeks. Travel and entertainment-related stocks, which have been under a Covid cloud, staged a mini recovery amid more optimistic sentiment about the ongoing impact of the pandemic. Paddy Power Betfair owner Flutter rose 3.6 per cent to €139.60 despite concern over a string of sporting fixtures in the coming weeks. The State's largest hotel chain, Dalata, rose 1 per cent to €3.72 while Ryanair rose marginally to €15.50 after falling in the previous session. Irish Ferries owner Irish Continental Group, however, retreated 1 per cent to €4.53. Banking stocks traded lower, with AIB falling 2.6 per cent to €2.14, while Bank of Ireland was down 2 per cent to €5.05.

LONDON

The Ftse 100 recoiled from its pandemic highs on Thursday despite broadly positive sentiment among most other major markets. Traders were more positive on Ftse 250 firms, which held marginally higher, and the junior AIM, as the main index lost pace gradually throughout a quiet trading session. The Ftse 100 ended the day 17.68p, or 0.24 per cent, lower at 7,403.01p.

In company news, Aer Lingus and British Airways owner International Consolidated Airlines Group (IAG) saw shares stagnate amid reports the airline had scrapped flights to Hong Kong until March. Bloomberg reported that the operator would temporarily suspend services in the region as the territory tightened air crew quarantine restrictions to contain the spread of Omicron.

Shares in IAG moved just 0.02p higher to 143.48p at the close of play. Galileo Resources climbed up the AIM index on Thursday after the mining firm entered into a joint venture with Statunga Investments for the development of the Luansobe copper project in Zambia.

EUROPE

German stocks finished in positive fashion despite high Covid rates as the markets closed for the year. The Dax increased by 0.21 per cent and the French Cac rose 0.24 per cent. Several European markets such as Italy, Germany, and Spain will be closed on Friday, while those including Paris and London will trade for half a session, ahead of the new year.

Siemens Healthineers initially gained 0.6 per cent after the US drug regulator granted emergency use authorisation to the German health tech firm's at-home Covid-19 tests but finished the session down.

NEW YORK

The S&P 500 and the Dow hit all-time highs on Thursday, extending a record-setting run as a dip in weekly jobless claims allayed fears over the economic damage from a surge in Covid-19 infections in the US. The blue-chip Dow was set to rise for a seventh straight session, its longest streak of gains since March. The Labor Department’s data showed that the number of Americans filing for new unemployment claims slipped to 198,000 in the week leading up to Christmas, from 205,000 a week earlier. Economists polled by Reuters had forecast 208,000 applications for the latest week.

Among individual stocks, Biogen slipped 7.4 per cent, giving back gains from the prior session as Samsung BioLogics denied a media report that the South Korean firm was in talks to buy the US drug maker. China's ride-hailing firm Didi Global reported a decline in third-quarter revenue, as its domestic business took a hit from a regulatory crackdown.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times