Omicron chill continues to hold back equity markets

US indices rise as inflation report is in line with expectations

Stocks fell again on Friday on nervousness around the Omicron Covid-19 variant, while US inflation coming in broadly in line with expectations but at its highest level since 1982 did little to allay uncertainty around US monetary policy.

Dublin

The Irish index of shares fell in the final session of the week, with the Dublin market closing on 8,176, down almost 0.3 per cent.

Ryanair finished almost 1 per cent lower at €14.88, with the airline still feeling the chill from ongoing worries over the impact of tougher Covid-19 restrictions in England.

Building stocks also suffered, with CRH down for a second day, losing almost 0.5 per cent to close at €44.34. Kingspan saw its shares decline more than 2 per cent to €101.95.

Food group Glanbia was up 1.2 per cent, ending the week at €12.23. The nutrition group said this week it had agreed a deal with Glanbia Co-op to dispose of its stake in Glanbia Ireland.

Banking stocks were mixed, with Bank of Ireland ending the week at €4.914, off 0.77 per cent. AIB, meanwhile, gained almost 0.2 per cent to end the week at €2.156.

London

The FTSE 100 and mid cap indices slipped for a third straight session on Friday after data pointed to stalling economic growth in Britain, even before the emergence of the Omicron coronavirus variant.

The benchmark FTSE 100 index eased 0.4 per cent pressured by the healthcare sector as heavyweight drugmaker AstraZeneca fell 2 per cent after Berenberg cut its price target on the stock.

The main index clocked its biggest weekly gain in eight months, boosted by a strong recovery in mining stocks.

Data showed Britain’s economy grew by a weaker-than-expected 0.1 per cent in October, leaving it 0.5 per cent smaller than it was in February 2020, just before the country went into its first Covid-19 lockdown.

Capping losses on the main index, miners gained 0.7 per cent tracking copper prices. Defensive stocks such as consumer staples, which tend to be less sensitive to the economic climate, also rose.

British American Tobacco gained nearly 2.5 per cent after a Wall Street Journal report that said the US Senate was dropping a proposal to impose higher taxes on vaping, oral nicotine and other next generation products.

The domestically focussed mid-cap index fell 0.9 per cent, with Ashmore Group dropping 2.7 per cent as Goldman Sachs downgraded the asset manager to "neutral".

Europe

The pan-European Stoxx 600 slipped 0.3 per cent , down for third straight session on worries that measures to curb the spread of the Omicron variant could hit economic recovery.

But a strong two-day advance at the beginning of the week saw the index post its strongest weekly gain since March, up 2.8 per cent. Technology and retail were the top decliners in Europe on Friday.

Auto stocks were led higher by Daimler, which rose 2.9 per cent after spun-off Daimler Truck climbed in its market debut on the Frankfurt Stock Exchange.

Tobacco group Swedish Match jumped 7.2 per cent after the Wall Street Journal report on the proposed vaping tax.

Food delivery companies Deliveroo and Just Eat Takeaway slipped 2.4 per cent and 3.2 per cent respectively, adding to losses in the past week on worries that a European Commission ruling on gig economy drivers would hurt profits.

New York

US stock indices rose on Friday after data showed that consumer prices rose largely in line with estimates last month, taking some pressure off investors concerned about the Federal Reserve’s aggressive tightening of its monetary policy.

The Labor Department’s report showed US consumer prices accelerated 6.8 per cent in the 12 months through November, their highest level since 1982, as the cost of goods and services rose broadly amid supply constraints.

At 10.10am ET, the Dow Jones Industrial Average was up 85.38 points, or 0.24 per cent , at 35,840.07, the S&P 500 was up 23.04 points, or 0.49 per cent, at 4,690.49, and the Nasdaq Composite was up 77.22 points, or 0.50 per cent, at 15,594.59.

Shares of Oracle jumped 15.1 per cent after the enterprise software maker forecast an upbeat third-quarter outlook.

The S&P 500 index dropped 5.2 per cent from a record high hit on November 22nd as investors digested Jerome Powell’s renomination as the Fed’s chair, his hawkish commentary to tackle surging price pressures and the discovery of the Omicron variant.

A positive update by Pfizer and BioNTech on their vaccine offering some protection against the latest variant helped push the three main indices for gains of over 3 per cent each this week. The S&P is now down 1.2 per cent from its all-time peak.

Nine of the 11 major S&P sectors advanced in early trading, with the information technology sector, which houses companies such as Apple, Microsoft and Nvidia, rising the most.

Broadcom jumped 10.1 per cent as the semiconductor firm sees first-quarter revenue above Wall Street expectations and announced a $10 billion share buyback plan. – Additional reporting: Reuters