By Bansari Mayur Kamdar and Amal S
-A rebound in commodity and travel stocks drove UK shares higher on Tuesday, a day after the market hit a two-week low on concerns that surging cases of COVID-19 variant Omicron would spark fresh restrictions.
The blue-chip FTSE 100 index ended 1.4% higher and the domestically focussed mid-cap index gained 1.2%.
Oil majors BP and Royal Dutch Shell rose nearly 1% each, tracking higher crude prices, while industrial metal miners gained 2.2% on an upswing in copper rates. [MET/L] [O/R]
The travel and leisure sector leaped 3.2% after losing 0.7% in the previous session.
UK's blue-chip FTSE 100 has gained 13% so far this year but has lagged behind its European and U.S. peers because sectors worst-affected by the pandemic, such as energy and banks, account for a significant proportion of the index.
Seeking to support the country's hospitality sector and other businesses, Britain said earlier on Tuesday it would offer 1 billion pounds ($1.3 billion) to businesses hit hardest by the Omicron surge.
"Realistically the payments won't go far, and they certainly won't make up for the pop in trade these venues usually enjoy at this time of year. But for now, they can at least remain open though with consumer confidence leaking away some businesses might find it more cost effective to simply shut up shop," said Danni Hewson, financial analyst at AJ Bell.
Prime Minister Boris Johnson is expected to make an announcement in the next 48 hours on whether to impose "circuit-breaker" restrictions in England to stem the spread of the Omicron variant of coronavirus, The Sun newspaper reported.
British business confidence began to feel the impact of the Omicron variant this month, alongside further upward pressure on prices and staffing costs, a survey showed.
Schroders plc gained 3.1% after the money manager reached an agreement to buy 75% of Greencoat Capital Holdings Limited for 358 million pounds ($473.17 million).