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Commodity, Travel Stocks Lift UK Shares; Omicron Fears Ease

  • Oil rebounds ahead of OPEC meeting
  • Pendragon gains on upgraded profit outlook
  • Blue Prism agrees to be bought by SS&C Technologies
  • FTSE 100 up 1.2%, FTSE 250 adds 1.0%

Dec 1 (Reuters) - UK's FTSE 100 rebounded on Wednesday, boosted by a recovery in oil, mining, and travel stocks after concerns around the new coronavirus variant Omicron eased slightly.

The commodity-heavy index gained 1.2% in morning trade, with miners jumping 2.9% following a bounce-back in copper prices, while rate-sensitive banks rose 1.9%.

Oil majors BP and Royal Dutch Shell climbed more than 3% each as major producers prepared to discuss how to respond to the threat of a hit to fuel demand from the Omicron variant.

"Investors are buying the dip because it appears that the variant isn't going to be as disastrous as initially thought and they're using this pullback as an opportunity," said David Madden, market analyst at Equiti Capital.

"If you just roll the clock back a week or two, the FTSE was touching 20-month highs."

The blue-chip index suffered its worst monthly performance in over a year in November as worries about vaccine efficacy against Omicron and hawkish comments by Federal Reserve Chairman Jerome Powell fuelled a selloff. 

The domestically focussed mid-cap index added 1.0%, with Wizz Air and Easyjet leading gains. Other travel stocks recouped some of Tuesday's heavy losses.

"The movement in the airline sector sums up how the markets as a whole of reacted dreadfully initially to the news and then realized that things aren't as bad as they initially thought," Madden added.

British Health Secretary Sajid Javid said there were 22 confirmed cases of the Omicron variant in the country, and urged people to book a COVID-19 booster shot.

Pendragon Plc climbed 6.5% after it raised its annual profit outlook for the second time in two months on continued robust demand for used vehicles. 

Software group Blue Prism rose 1.7% after it agreed to be bought by U.S.-based SS&C Technologies for 1.24 billion pounds ($1.65 billion).

Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Uttaresh.V

Source: Reuters

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