Miners lift FTSE 100 in cautious trading as Omicron fears persist

Mining stocks lifted the UK's FTSE 100 higher on Monday in cautious trading, as the government warned about the Omicron variant and ahead of an interest rate decision later this week.

Mining stocks lifted the UK's FTSE 100 higher on Monday in cautious trading, as the government warned about the Omicron variant and ahead of an interest rate decision later this week. The blue-chip FTSE 100 added 0.2% and the domestically focussed mid-cap index rose 0.1% in morning trade.

Base metal miners jumped 1.5%, tracking gains in metal prices after top consumer China pledged to focus on economic stability, bolstering demand outlook for metals. However, there was an air of caution as Prime Minister Boris Johnson warned on Sunday that Britain faces a "tidal wave" of the Omicron coronavirus variant and two vaccine doses will not be enough to contain it.

"The big factor is Omicron. It would be another reason for people to say let's shut shop and wait to see how this thing develops, see what January brings and what measures, if any, governments around the globe have put in place," said Stuart Cole, macro economist at Equiti Capital. Underwhelming growth data and the fast-spreading Omicron variant have dampened expectations that the Bank of England would raise interest rates soon.

Money market futures are pricing in about 40% probability of a 15 basis points rate hike on Thursday, down from nearly 70% at the start of last week. Wizz Air fell 1.9% after HSBC downgraded the stock to "reduce". Airlines have called for support after Omicron dented recovery hopes, according to a report.

Purplebricks Group slumped 19.9% after the estate agent said it would delay its interim results and warned of a potential financial risk as it found problems with communications with tenants about deposit registrations. Recruiting firm SThree Plc tumbled 11.2% after saying its chief executive officer would step down due to personal reasons, despite expecting to post record annual profits as reopening spurred a hiring boom.