By JACK BARNETT cityam.com
London markets opened flat this morning as a rally among travel and airline stocks lost steam.
The capital’s premier FTSE 100 index edged up 0.07 per cent to 7,510.12 points during the first hour of trading, while the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, lost 0.03 per cent to dip to 23,889.47 points.
The City’s flagship indexes were weighed down by airlines, hotel groups and aerospace engineers paring back some yesterday’s gains.
British Airways owner IAG, which finished yesterday top of the FTSE 100’s biggest risers, fell 2.03 per cent, while airplane engine manufacturer Rolls Royce slipped 1.23 per cent.
Short haul airlines easyJet and Wizz Air, which laced the top of the best performers’ table on the FTSE 250 yesterday, sunk back down this morning.
The former dropped 0.03 per cent, while the latter dipped 0.74 per cent.
Investors poured into travel stocks during the first session of 2022 as the likelihood of tougher measures to curb the spread of Omicron in England receded after the UK government confirmed yesterday they are sticking with plan B measures.
A more muted morning session in London was also driven by growing investor concern over intensifying inflationary pressures in the UK, according to analysts.
Russ Mould, investment director at AJ Bell, said: “If the UK markets started their first trading day of 2022 by climbing the wall of worry over Omicron, they took a slight stumble on day two as inflation concerns and speculation on interest rates returned to the fore.”
Supermarkets offset the travel sector’s losses, with middle class favourite Ocado topping the biggest riser table by climbing 4.72 per cent. Fellow supermarket Sainsbury’s added 1.23 per cent.
The pound crept up on the greenback, strengthening 0.03 per cent to buy $1.3536.