Hopes of a Santa rally fade as stock markets slump on Omicron fears

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Rattled investors are not feeling festive! Hopes of a Santa rally fade with stock markets around the world hit by Omicron fears


Hopes of a Santa rally faded as stock markets around the world were hit by mounting concerns over the Omicron coronavirus variant and lockdowns.

On a day of jitters in dealing rooms worldwide, the FTSE 100 closed down 0.99 per cent, or 71.89 points, at 7198.03 after briefly dropping to a one-month low of around 7107 in early trading. 

The FTSE 250, which contains more domestically-focused UK stocks, fell 1.01 per cent, or 230.50 points, to 22549.88.

On a day of jitters in dealing rooms worldwide, the Dow Jones Industrial Average was down 1.6% while the S&P 500 shed 1.5% and the tech-heavy Nasdaq Composite dipped 1.6%

On a day of jitters in dealing rooms worldwide, the Dow Jones Industrial Average was down 1.6% while the S&P 500 shed 1.5% and the tech-heavy Nasdaq Composite dipped 1.6%

The picture was similarly bleak in Europe, with the German Dax index dropping 1.9 per cent to its lowest level since early December after the Berlin government tightened restrictions on UK travellers.

On Wall Street the Dow Jones Industrial Average was down 1.2 per cent while the S&P 500 shed 1.1 per cent and the tech-heavy Nasdaq Composite dipped 1.2 per cent.

‘It looks like the only thing Santa’s bringing investors this Christmas week is a whole lot of uncertainty’, said AJ Bell analyst Danni Hewson. 

She added that markets have succumbed to this particular variant of Covid ‘as country after country implements greater lockdown measures’.

Meanwhile, oil markets came under pressure amid fears new lockdowns, much like previous ones, will cut demand for fuel as people travel less. Brent crude fell to just below $70 a barrel.

The decline may force major oil-producing nations such as Saudi Arabia and Russia to tighten the taps in a bid to squeeze supply and keep prices elevated. 

But Hewson flagged that such a move could result in the global economy ‘desperate for supply and struggling to cope with rising [oil] prices’ once it reopened again.

Fears of a new lockdown also hit currency markets, with the pound briefly dropping to its worst level in over a year against the dollar.

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