28th Dec 2022 16:57
(Alliance News) - London's FTSE 100 outperformed global peers on Wednesday as equity market trading resumed after the Christmas break.
Shares in London rose following news that China has eased Covid-19 curbs, though the developments may intensify inflationary pressure, possibly forcing central banks to continue pressing on the monetary policy tightening pedal.
The FTSE 100 index closed up 24.18 points, or 0.3% at 7,497.19. The FTSE 250 ended up 55.42 points, or 0.3%, at 18,885.50, and the AIM All-Share closed up just 0.32 of a point at 832.28.
The Cboe UK 100 ended up 0.4% at 750.26, the Cboe UK 250 closed up 0.4% at 16,358.17, and the Cboe Small Companies ended up 0.4% at 13,115.99.
In European equities on Wednesday, the CAC 40 in Paris lost 0.6%, while the DAX 40 in Frankfurt gave back 0.5%. The indices had added 0.7% and 0.4%, respectively, on Tuesday.
In New York, the Dow Jones Industrial Average was down 0.6% at the time of the closing bell, in London, the S&P 500 was down 0.7% and the Nasdaq Composite down 1.0%.
Stocks in New York struggled as investors were confronted with inflationary fears after China's move to ease Covid-19 curbs.
In a snap move late Monday, China said from January 8 inbound travellers would no longer be required to quarantine upon arrival, in a further unwinding of hardline Covid-19 controls that had torpedoed its economy and sparked nationwide protests.
China has largely kept itself closed off from the world since March 2020, shortly after Covid-19 first emerged.
The new rules follow China's decision this month to roll back much of a zero-Covid regime that had mandated mass testing, strict lockdowns and long quarantines in government-run facilities.
China says it will resume issuing ordinary visas and passports in another big step away from anti-virus controls that isolated the country for almost three years, setting up a potential flood of millions of Chinese going abroad for next month's Lunar New Year holiday.
Miners ended higher following the news out of China. Antofagasta rose 2.8%, Anglo American added 1.1% and Glencore climbed 0.3%. Package holiday firm On The Beach surged 12%, as traders mull what China's Covid restriction ease could mean for the travel sector.
"The measures should initially benefit the travel and hospitality sectors as well as catering. Then gradually it will lead to an increase in the mobility of residents in the country," analysts at ING commented.
The news could serve to intensify inflationary pressures, however, which central banks across the globe have been vying to keep a lid on.
In 2022, the US Federal Reserve has enacted 425 basis points worth of hikes, the Bank of England 325 basis points and the European Central Bank 250.
The pound was quoted at USD1.2029 late on Wednesday in London, lower compared to USD1.2064 at the early equities close on Friday. The euro stood at USD1.0617, flat against USD1.0615. Against the yen, the dollar was trading at JPY134.23, higher compared to JPY132.72.
Back in London, retailers ended higher. JD Sports rose 2.2%, Next added 0.9% and boot maker Dr Martens rose 3.3%.
Boxing Day footfall was up by more than a third on the UK's high streets despite train strikes and the cost-of-living crisis.
Concerns had been raised that strikes and tightening budgets could scare consumers away from shopping destinations on the first day of the sales.
But industry analyst Springboard said data from Monday showed footfall was 39% higher than last year.
Elsewhere in London, Applied Graphene rose 20%. It said it received non-binding indicative proposals for its sale or the sale of its main operating subsidiary.
The Cleveland, England-based graphene materials maker said it is in discussions with the parties involved and expects final proposals in early January. After this, the board would then select a preferred bidder to progress with. Applied added that there can be no certainty any final proposals will be made, nor the terms of any proposals made.
In November, Applied Graphene shares plunged after the company warned it could run out of cash, but said it would not be possible to go cap in hand to investors. The company attributed this to unfavourable conditions for small-cap equities.
Applied Graphene will need additional funding to extend its cash runway beyond this coming January 31, by which point its current financial resources will be depleted.
Polarean Imaging added 18%. It won US Food & Drug Administration approval for its drug device combination product, Xenoview, for evaluation of lung ventilation in adults and paediatric patients aged 12 years and older.
Brent oil was quoted at USD82.87 a barrel late Wednesday, up from USD82.67 on Friday, but down from the USD86.06 it fetched on Tuesday.
Russia banned oil sales to countries and companies that comply with a price cap agreed by Western countries in response to Moscow's offensive in Ukraine.
"The supply of Russian oil and oil products to foreign legal entities and individuals is prohibited if the contracts for these supplies directly or indirectly" are using a price cap, the presidential decree said.
The decree will be in effect from February 1 until July 1.
Germany on Wednesday shrugged off Russia's ban on oil sales to countries and companies that comply with a price cap agreed by Western allies, saying it has "no practical significance".
"I would not like to say that it's irrelevant but it has no practical significance," said an economy ministry spokeswoman, adding that Germany has been preparing since early summer to do without Russian oil.
Germany had been highly reliant on Russian energy, but has been forced to wean itself off crude, coal and gas from the power giant after Moscow invaded Ukraine.
The price ceiling of USD60 per barrel agreed by the EU, G7 and Australia came into force in early December and seeks to restrict Russia's revenue while making sure Moscow keeps supplying the global market.
Gold was quoted at USD1,801.04 an ounce at the time of the closing bell in London on Wednesday, up against USD1,798.25 on Friday.
Thursday's economic calendar has the latest US unemployment claims reading at 1330 GMT.
By Eric Cunha, Alliance News news editor
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