Why it’s a happy year for London’s flagship index

The FTSE-100 jumped just 1.5 percent at market open, despite concerns about industrial disruptions.

The London First index was driven higher by a 3.8 per cent rise in oil giant Shell. Meanwhile, the prospect of a recovery of Asian travel sent shares in British Airways IAG as well as engine maker Rolls-Royce sharply up in early trade.

The indexIt traded up 1.67% as of 8:45 AM.

The morning rebound comes despite a wave of UK industrial and rail strikes that have hampered a return to the office on the first working day of 2023.

As investors weighed the future implications of tight lockdown policies in Asia’s second-largest economy, there was mixed reaction to the uncertainty surrounding the spread of Covid-19 in China.

Analysts today stated that the London benchmark reacted to uncertainty in early trading and started the year on a positive note.

“In the UK, the first index of the year opened ahead of early exchanges, driven by profit signs across various sectors, such as oils and banking,” said Richard Hunter, head of markets at trading platform Interactive Investor.

“In addition, the potential for increased Asian travel has also boosted companies such as International Consolidated Airlines and Rolls-Royce, while the initial risk-taking approach has come at a slight cost to the more defensive segments.”

The rebound comes after a resilient performance for 2022, with a FTSE-100 Index increasing 0.9 percent and an average dividend yield of 3.7%.

The FTSE’s popularity has been boosted by the UK’s oil giants and the low density of technology stocks in developing countries.

The FTSE-250, which is more domestically-oriented, did not see the same boost and lost 19.7 percent of its value as the UK economy fell into recession and struggled to grow and stabilize.