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UK Shares Slump 2% as Omicron Concerns Hit Commodity Stocks

  • Mid-cap index eyes two-month lows
  • Standard Chartered fined $61.51 mln for regulatory lapses
  • Oil, metal prices fall as Omicron fuels demand worries
  • FTSE 100 down 2.2%, FTSE 250 off 2.0%

Dec 20 (Reuters) - UK shares tracked a slide in global equity markets on Monday, as investors worried about a surge in cases of the Omicron coronavirus variant in Europe and the United States.

The blue-chip FTSE 100 index declined 2.2% to hit a two-week low in early deals.

"There are not a lot of reasons to be optimistic as we head to the end of the year," said Michael Hewson, chief market analyst at CMC Markets.

"A lot of people are done for the year. So, there is not much in the way of buyers out there. Concerns about Omicron, not just across Europe but globally, with all the talks of a lockdown is not a great environment to buy shares. Along with this is the fact that Joe mentioned that he is not going to back the U.S. infrastructure plan," Hewson said while referring to U.S. Senator Joe Manchin.

Oil majors BP and Royal Dutch Shell fell nearly 3% each after crude prices dropped 3%, while industrial metal miners lost 3.1% due to weakness in copper prices.

Asia-exposed financial stocks like lender HSBC and insurance firm Prudential slid 2.2% and 4.1% respectively as Asian shares fell to one-year lows.

The domestically focussed mid-cap index fell 2.0%, eyeing a two-month low, with the travel and leisure sector leading the declines with a 3.3% drop.

The mid-cap FTSE 250 index has underperformed the blue-chip FTSE 100 index so far this year, adding 9% compared to the 10% recovery in the benchmark index, as weaker travel and leisure stocks capped gains.

The UK government's chief scientific adviser Patrick Vallance told ministers at the weekend that new COVID-19 restrictions should be introduced as soon as possible to stop the NHS being overwhelmed, according to a media report. 

Britain's Deputy Prime Minister said twelve people have died from the Omicron variant in the UK, and 104 are currently in hospital with it. 

Standard Chartered fell 2.0%, tracking a decline in financial stocks and after the lender was fined 46.55 million pounds ($61.51 million) by the Bank of England for regulatory lapses.

Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Shounak Dasgupta and Uttaresh.V

Source: Reuters

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