The FTSE 100 index reached its highest level since February 2020 on Christmas Eve, driven by recent global stock growth as some of the concerns about the Omicron coronavirus variant have eased from the market.
The main value of the British stock rose by as much as 0.4 percent to 7,403.65, the highest point of market collapses caused by coronavirus in early 2020. Profits on Friday, realized during the holiday shortcut, later fell, leaving the index low at the previous close .
The recovery of UK stocks from the lowest pandemic values has been relatively slow. Unlike most other large global indices, the FTSE 100 has yet to return to its peak of early 2020, and is even further from the all-time peak of 7,903.50 it touched in 2018. In contrast, the S&P 500 has recovered its losses from pandemics until August last year and has since broken a number of records. Eurozone Stoxx 50 and Japan’s Nikkei 225 have also passed their highs before Covid in recent months.
The stunning performance of the United Kingdom is partly due to the lack of high-growth technology companies that have driven the relentless rise of U.S. stocks. Instead, FTSE – dominated by miners, oil companies and banks – is more focused on so-called “value” sectors, which tend to perform well in times of strong global growth.
The constant threat of coronavirus, the latest in the form of Omicron, has kept the value of the stock, says Luca Paolini, chief strategist at Pictet Asset Management.
“Next year, if you have a period of surprising global growth, the value will return,” Paolini said. “That means the UK is coming back.”
FTSE’s optimistic end of the year – up 1.4 percent this week – follows a period of volatile trading. The index fell in late November after the discovery of Omicron and swayed back and forth as the variant quickly spread in the UK and elsewhere.
A recent rally suggests investors believe the latest revival of Covid-19 – which has not deterred the Bank of England from raising interest rates for the first time since the pandemic began earlier this month – will not disrupt the economic recovery.