FTSE closes higher despite rising Indian variant COVID cases in UK

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HEXHAM, ENGLAND - MAY 13: Phil Nugent draws up the Pfizer-BioNTech COVID-19 vaccine at the Hexham Mart Vaccination Centre on May 13, 2021 in Hexham, England. The seventh large vaccination centre for the region in Hexham joins the six large vaccination centres which are at Newcastle’s Centre for Life, the NHS Nightingale Hospital North East, Sunderland, the Arnison Centre, Durham, Darlington Arena, The Riverside Stadium at Middlesbrough and the Auction Mart at Penrith. These large centres operate in conjunction with local vaccination services run by groups of GPs working together in Primary Care Networks and services offered by some community pharmacies. The Hexham vaccination centre will be called ‘Hexham Mart Vaccination Centre’ and is based at Hexham Mart in Northumberland. (Photo by Ian Forsyth/Getty Images)
Public Health England has recorded 1,313 UK cases of the Indian variant, and according to figures released yesterday, cases are more than doubled in recent weeks. Photo: Ian Forsyth/Getty Images

European stock markets rose on Friday, with London’s benchmark index rising back above 7,000 points despite concerns about an Indian coronavirus variant spreading in the UK.

The FTSE 100 (^FTSE) closed 1.2% higher, while the CAC (^FCHI) in France pushed 1.4% higher and the German DAX (^GDAXI) also jumped 1.4%.

The rally came despite mounting concerns among British officials about a new variant of COVID-19 spreading in the UK.

Public Health England has recorded 1,313 UK cases of the so-called Indian variant, and according to figures released yesterday, cases are now more than double those seen up to 5 May.

The Department of Health and Social Care (DHSC) said ministers "cannot rule out reimposing economic and social restrictions at a local or regional level if evidence suggests they are necessary to contain or suppress a variant which escapes the vaccine."

Health Secretary Matt Hancock said: "We are monitoring the situation very carefully and will not hesitate to take further action if necessary."

Boris Johnson is set to hold a press conference addressing the variant on Friday evening at 5pm.

The next stage of lockdown easing is set to take place on 17 May. People will be permitted to meet and mix indoors, including inside pubs and restaurants, and cinemas. Some experts are calling for Monday’s relaxation to be delayed due to the spread of the Indian variant. 

Watch: British PM 'anxious' about spread of Indian variant

In London, mining stocks were mainly lower on the day after being hit by a big drop in copper and iron ore prices in China overnight.

Across the pond, the S&P 500 (^GSPC) rose 1.3% and the Dow Jones (^DJI) edged 0.9% higher on opening. The tech-heavy Nasdaq (^IXIC) was 1.9% higher at the time of the European close.

Read more: 4 in 5 UK companies won't ask staff for proof of COVID vaccine

"Stocks are higher, recovering some ground lost during a choppy week. Fed officials have been out in force to calm inflation nerves," Neil Wilson of Markets.com said.

"Governor Christopher Waller said rates will not rise until policymakers see inflation above target for a long time or there is excessively high inflation, saying the Fed will need to see several more months of data.

"He also stressed that there is only a temporary ‘mismatch’ between surging demand for workers and people’s willingness/ability to get a job."

US retail sales were unchanged last month, after a surge of spending in March. On an annual basis, retail spending was up 51.2% in April.

Excluding motor vehicles and parts, retail sales fell 0.8% month-on-month in April. The reading came in below the 1% monthly growth which had been expected, as the US economy picked up speed.

Separately, US consumer confidence fell unexpectedly this month as Americans grow more concerned about rising prices.

The University of Michigan’s Index of Consumer Sentiment dropped to 82.8 this month, down from 88.3 in April, preliminary data shows. Economists had expected a rise to 90.4.

Read more: Amazon to create 10,000 new jobs in Britain

Asian shares rose overnight after Wall Street reversed a three-day losing streak with a broad stock market rally powered by technology companies and banks.

Shares in big semiconductor manufacturers led the advance in Asia, where almost all markets opened higher.

Japan's Nikkei 225 (^N225) added 2.3% while the Hang Seng in Hong Kong (^HSI) rose 1.2%. The Shanghai Composite index (000001.SS) rose 1.8%.

Markets in Seoul were also lifted by gains for Samsung Electronics and SK Hynix, which climbed after announcing plans to expand their investments in chip production and development.

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