FTSE 100 index rallies for third day as Omicron fears fade – business live | Business
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The largest tour operator in the world Tui said he expects travel to rebound to pre-crisis levels next summer, as it recorded a loss of € 2.4 billion in a full year. However, he said it was close to breakeven in the fourth quarter and was almost full for the winter quarter.
Tui CEO Fritz Joussen said:
It is still too early to make a real prognosis for the 2022 summer season. But we are optimistic that tourism will be able to return to its 2019 levels next summer. We want, we can and we will find our way back to economic strength.
The program for the first financial quarter of 2022 is already almost entirely sold. This means that we are currently reaching 69% of the pre-crisis level. We expect summer 2022 to reach a largely normalized booking level.
He said the pandemic had prompted vacationers to book “much later and on shorter notice” but that next summer looks “very encouraging in all of Tui’s markets”.
Global stock markets rallied yesterday as concerns about the severity of the Omicron Covid variant and its impact on economies faded. There was also news that GSK antibody treatment worked against the complete combination of Omicron mutations; the United States passed legislation to pave the way for an increase in the debt ceiling; and the hawkish inclination of the US Federal Reserve has been digested and integrated by now.
The Nasdaq jumped 3%, the biggest one-day gain since March, the S&P 500 rose 2% and the Dow Jones rose 1.4%. In Europe, the German, French and Italian indices all rose more than 2% while the FTSE 100 index in London closed up 1.49%. The UK index recouped all of its post-Thanksgiving Omicron losses and closed at its highest level since November 15.
The optimism has spread to Asia, where the Nikkei of Japan gained 1.4%, the Shanghai Composite Index is up 1.18% while the Hang Seng of Hong Kong is stable.
Trading in struggling Chinese developer Kaisa Group Holdings’ shares has been suspended on the Hong Kong stock exchange, raising further concerns about the financial stability of the country’s huge real estate sector. Evergrande, the world’s largest real estate developer, is on the brink of collapse.
Wednesday’s suspension comes as Kaisa was unlikely to repay a $ 400million (£ 301million) dollar bond before Tuesday night’s deadline in the United States, Reuters said, citing a source directly informed of the case.
The Chinese government sparked a crisis in the real estate industry when it launched a campaign last year to curb excessive indebtedness by real estate companies as well as widespread consumer speculation.
Is this too much optimism? demand Ipek Ozkardeskaya, senior analyst at Swissquote bank.
The news is not all rosy, but the perception is very optimistic, which supports the big gains back to back. In theory, such large gains are a sign of instability and should be taken with caution, but the good news is that volatility is easing and the VIX index fell 20% yesterday, meaning the latest fears might slowly start to fade.
Still, US inflation data due on Friday remains a significant threat to market sentiment and could encourage some consolidation and possibly profit taking in critical data.
Japan released figures showing that its economy contracted faster than initially reported between July and September, at an annualized rate of 3.6% instead of the previously estimated 3% contraction.
European stock markets opened slightly lower after the sharp increases observed over the past two days, with the German Dax down 0.2%, the French CAC down 0.1%, Italy down 0.2 % and the Spanish ibex down 0.4%. Only the FTSE 100 index in London is ahead of 0.18% to 7,352, a gain of 12 points.
Michael Hewson, chief market analyst at CMC Markets UK, said the “unbridled optimism” seen in the past two days after last week’s market panic will fade as Europe continues to struggle against increasing Delta infections, which is likely to hamper recovery across Germany, Austria and the Netherlands where restrictions and lockdowns have been reimposed.
These concerns about Delta were acknowledged earlier this week by the IMF, which warned it may have to cut its GDP forecast for the eurozone when it releases new estimates in January.
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