The FTSE 100 has made significant gains at the open, erasing most of yesterday’s losses in uncertainty surrounding new Covid restrictions.
The blue-chip index rose by 0.9% to 7,260 points.
As a reminder of how unpredictable the FTSE can sometimes be, traders have gotten over yesterday’s jitters and driven the blue-chip index higher.
The FTSE 100 dropped 1pc Monday due to fears of a new lockdown. However, it is currently trading at 0.8pc. This is likely because the Government delayed any decision regarding new restrictions. However, volatility can be fueled by thin trading during the festive period.
The index was driven up by miners like Rio Tinto and Anglo American, as well as oil majors BP, Shell, and Shell, which added almost 1.4pc each.
The domestically-oriented FTSE 250 also saw a 0.7pc increase. Schroders gained 1.8pc following the confirmation of a deal to purchase 75pc from Greencoat Capital for PS358m.
As Russia reduces supplies to Europe, gas prices rise
The Russian blockade of gas flows to Europe via its key pipeline caused gas prices to soar to the highest levels since October, a record.
Bloomberg reports that the benchmark European price rose to 5.5% after gas entering Germany’s Mallnow compressor station (where the Yamal Europe pipeline terminates) dropped to zero on Tuesday.
As Europe’s freezing temperatures increase, lower supplies put more pressure on the energy markets. This is causing an increase in demand for power and gas. The gap is also being filled by renewable sources.
As traders weigh lockdown risk, Pound rallies
Sterling has surged higher as fears of a lockdown eased and Monday’s losses against USD were erased.
Yesterday’s fall in the pound was due to expectations that Boris Johnson would lock down the country.
Although sentiment has improved slightly due to the delay by the Prime Minister, the focus is still on the possibility of tighter restrictions over the next few weeks.
To $1.3247, the pound gained 0.3% against the dollar. It fell 0.1pc against the euro to 85.28p.
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