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Energy, bank stocks drag London's FTSE 100; Omicron fears weigh

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By Reuters

By Bansari Mayur Kamdar and Amal S

-London’s FTSE 100 ended lower on Monday, weighed by energy and financial shares, while reports of the first death in Britain due to the Omicron coronavirus variant added to worries over the impact of tighter restrictions on year-end spending and economic activity.

After rising as much as 0.2%, the blue-chip FTSE 100 erased gains to end 0.8% lower, with banks shedding 2.19% and oil majors BP and Royal Dutch Shell falling 2.2% and 2.7% respectively, tracking weaker crude prices. [O/R]

Market participants were cautious after Prime Minister Boris Johnson said on Monday at least one person had died in the UK after contracting the Omicron variant.

“News that at least one person has died from the Omicron variant sent London markets plunging after what had been a rather directionless morning. All those stocks that rely on consumer confidence have unsurprisingly borne the brunt of today’s selloff,” said Danni Hewson, financial analyst at AJ Bell.

Underwhelming growth data and the fast-spreading variant have dampened expectations that the Bank of England would raise interest rates soon.

The domestically focussed mid-cap index fell 1.2%, weighed by a 3.5% drop in the travel and leisure sector.

Money market futures are pricing in about 40% probability of a 15-basis-point rate hike on Thursday, down from nearly 70% at the start of last week.

Wizz Air fell 4.2% after HSBC downgraded the stock to “reduce”. Airlines have called for support after Omicron dented recovery hopes, according to a report.

Purplebricks Group slumped 20.9% 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 13.2% 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.