Major UK stocks posted strong gains on Tuesday with net support from the strength in global markets.

There was choppy trading during Tuesday with sharp moves across most asset classes after the US open. Markets attempted to take a positive stance towards Omicron with a focus on long-term recovery hopes rather than short-term disruption.

US bond yields remained at elevated levels, but held below October highs. Wall Street equities edged lower with a sharp correction for the Nasdaq index.

The dollar was mixed with limited losses against high-risk currencies. EUR/USD was little changed, close to 1.1300. USD/JPY retreated slightly from fresh 5-year highs around 116.35. Sterling posted net gains on longer-term recovery hopes and short covering with EUR/GBP at fresh 22-month lows near 0.8350.

Commodity currencies recovered from Monday’s sell-off in choppy trading. Oil prices were underpinned by medium-term demand expectations. Precious metals recovered ground with some relief as US yields retreated from lows. Scandinavian currencies were unable to make headway.

Euro-zone equities posted further gains on Tuesday with on-going support from the positive trend in global bourses and optimism that near-term Omicron disruption would give way to strong recovery later in the year. The Eurostoxx 50 index posted a 0.8% advance.

Major UK stocks posted strong gains on Tuesday with net support from the strength in global markets. The UK currency was closed on Monday which also triggered catch-up gains during the day and the FTSE 100 index posted a gain of 1.6%.

Wall Street stocks retreated on Wednesday, primarily under the influence of a sharp correction in the technology sector. Equities were broadly resilient despite higher bond yields and S&P 500 index losses were held to 0.1%.

Futures edged lower on Wednesday and there was a more cautious tone in Asia.

Japan’s Nikkei 225 index gained 0.1% as the yen remained vulnerable while the Australian ASX index declined 0.3%.

China’s Shanghai index declined 1.0% amid Evergrande reservations with Hong Kong’s Hang Seng index 1.2% lower in late trading.

Stock to watch today

BP shares pushed higher yesterday on increased volume. Overall the shares continue to trade in a decent looking uptrend and are showing no signs of slowing. Yesterday we saw the shares gap higher and breakout from a triangle pattern, which indicates we will see a continuation higher in price over the short term.

CCM Opinion: BUY

Buy between 340 – 350p

Stop: 326.4p

Target: 404p

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