Both the blue chip FTSE 100 and mid-cap FTSE 250 Index continued to trade in positive territory at lunchtime on Friday. The former was trading 0.23% firmer at 7,145.85 and the latter 0.44% higher at 22,785.53.

The FTSE 100 is set for a 1.8% weekly gain, recovering some of the losses seen last week when fears around the new variant Omicron gripped global stock markets.

The UK market has taken some comfort from the most recent purchasing managers’ index print of 58.5 (a reading above 50 indicates growth) that has confirmed the strong nature of service sector growth in November.

However traders are very much focused on US payrolls data due out later today.

OIL STOCKS IN DEMAND

Oil stocks were in demand, reflecting firmer crude prices after OPEC+ said it would review supply additions ahead of its next scheduled meeting in light of the potential impact of the new Covid variant.

Shares in BP (BP) rose 2% to 343.65 helped by an upgrade note from Deutsche bank.

The broker has changed its recommendation from Hold to Buy and raised its price target from 320p to 404p. There are several factors driving the more positive stance.

First, an 18% increase in their 2022 Brent oil price forecast to $75. Second, Deutsche maintain that the oil majors have been exercising greater capital expenditure discipline, and that additional Iranian production is ‘nowhere in sight’.

Moreover, oil inventories are below five-year averages, and several OPEC members are encountering difficulties in raising production levels.

Shares in Royal Dutch Shell (RDSA) were also in demand rising 1.67% to £16.54.

RAISED GUIDANCE

Shares in Wickes (WIX) rallied 11.5% to 239.8p after the home improvement retailer raised its adjusted pre-tax profit guidance for the year to December 2021 to ‘no less than £83 million’, comfortably ahead of the £74 million-to-£75 million analyst consensus range.

Spun out of Travis Perkins (TPK) in April this year, the DIY retailer cited resilient trading and a ‘strong margin performance’ for its latest upgrade, as it continues to benefit from buoyant conditions in the repair, maintenance and improvement market.

Insurer Prudential (PRU) rose 1.4% to £12.88. and Legal & General (LGEN) climbed 1% to 286p after German peer Allianz raised its targets for shareholder returns for the 2022 to 2024 period.

SMALL CAP WRAP

Beowulf Mining (BEM:AIM) led the AIM leader board with a 22% advance to 8.875p as hopes rise of a change of attitudes in Sweden towards mining projects.

Shares in alternative capital provider Duke Royalty (DUKE:AIM) gained 4.5% to 46p after the company reported strong first half growth in revenues and profit and said it was confident of exceeding market expectations for the full year to 31 March 2022.

Stripping out the non-cash movement adjusted earnings after tax grew 125% to £4.7 million. A dividend of 1.1p per share was paid over the period.

Strong growth in the period was driven by deployment of over £23 million of new investments into three new royalty partners, while two divestments were undertaken.  In April the company raised £35 million of new equity.

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Issue Date: 03 Dec 2021