By Barbara Kollmeyer
London stocks were headed for weekly gains, but the FTSE 250 was looking at a loss as travel-related names took a hit amid worries about yet another potential strain of the coronavirus that causes COVID-19.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.76% rose 0.2% and was set to gain 0.8% for the week, as global equities struggled for traction and ahead of a U.S. holiday on Monday. The more domestically focused FTSE 250 index /zigman2/quotes/210598417/delayed UK:MCX +1.26% was down 0.1% and facing a weekly loss of 0.4%.
Fears over the potential impact on the U.K. from yet another coronavirus strain found in Bristol were weighing on travel names such as TUI /zigman2/quotes/206000695/delayed XE:TUI1 +3.84% , down 4%, Carnival /zigman2/quotes/202325446/composite CCL +3.12% , off 3.8%, easyJet /zigman2/quotes/202825892/delayed UK:EZJ +5.64% , down 3.4%, and FirstGroup /zigman2/quotes/202157466/delayed UK:FGP +2.05% , down 0.6%, said Joshua Mahony, senior market analyst at IG.
“Recent value stock gains have been built on the notion that the vaccination program and reopening process is linear and predictable by nature, yet strains in South Africa and now Bristol highlight the potential to derail that presumption,” he said.
Sky News reported that the mutation in Bristol may be able to bypass vaccines because it changes the appearance of the original strain. That is as a senior U.K. scientist warned on Thursday that the far-more infectious variant of the coronavirus that causes COVID-19, which first emerged in that country, could “sweep the world.”
As for bigger stocks on the rise, shares of AstraZeneca /zigman2/quotes/200304487/composite AZN +0.62% /zigman2/quotes/203048482/delayed UK:AZN +0.72% rose 1.6%, the day after the drug company, which has been in the spotlight for its development of a COVID-19 vaccine with the University of Oxford, reported strong results for the full-year on Thursday. Shares of fellow drug company GlaxoSmithKline /zigman2/quotes/200381158/delayed UK:GSK +0.85% /zigman2/quotes/209463850/composite GSK +1.16% rose 1%.
Mining stocks weighed on the downside, with shares of Anglo American /zigman2/quotes/201381512/delayed UK:AAL +3.55% down over 1% and Glencore /zigman2/quotes/201400686/delayed UK:GLEN +3.35% off 1.5%.
Elsewhere, fresh data showed the U.K. economy sank deeper than all other European countries in 2020, as confirmed by the Office for National Statistics. It marked the worst recession since the 1709 Great Frost, but the economy expanded 1% in the fourth quarter, avoiding a double-dip recession, noted analysts.