UK’s FTSE 100 eyes weekly gain as oil stocks rally outweigh Omicron fears

UK’s FTSE 100 inched higher on Friday, on course for weekly gains as a jump in commodity-linked stocks helped the blue-chip index shake off gloom around the Omicron variant of the coronavirus.

The FTSE 100 rose 0.2%. Oil majors BP (LON:BP) and Royal Dutch Shell (LON:RDSa) gained 2.2% and 1.5%, respectively, tracking firmer crude prices after OPEC+ said it would review supply additions ahead of its next scheduled meeting if the Omicron variant dents demand. [O/R]

Insurer Prudential (LON:PRU) climbed 2% and Legal & General Group (LON:LGEN) inched up after German peer Allianz (DE:ALVG) raised its targets for shareholder returns for 2022-24.

Miners slipped 0.9%, but were set for weekly gains of more than 3% as commodity prices bounced back from sharp losses seen last week after the new virus strain was detected.

“The worst case outcome looks a long way from priced in, and if the fears about the variant are realised, risky assets could still fall a lot further over the next few weeks,” said Thomas Mathews, markets economist at Capital Economics.

“But if it proves to be benign, all the uncertainty over the past week will unwind very quickly and we will be back to the ‘Goldilocks’ environment of the preceding few weeks.”

The FTSE 100 is set for a 1.4% weekly gain, outperforming its European peers for the fourth consecutive week and recovering some of last week’s losses.

The domestically focussed mid-cap index advanced 0.5%, with travel stocks rebounding after losses last week on fears of travel restrictions.

Home improvement retailer Wickes Group jumped 10.9% after it raised full-year profit outlook, saying it had continued to trade well in the fourth quarter so far.

Fund supermarket Hargreaves Lansdown (LON:HRGV) inched up 1% after appointing Amy Stirling as chief financial officer, to replace Philip Johnson.