Markets enjoy 'jaunty' start to New Year as spotlight falls on technology stocks

Richard Hunter, Head of Markets at interactive investor, said investors were focusing on the positives.

Mr Hunter added: "Technology stocks were in early focus, with Tesla sharply higher after a strong quarter of deliveries which surpassed expectations, and with Apple becoming the first company to exceed a market valuation in excess of $3 trillion.

"Despite continually rising cases of Omicron, there is a growing belief that the variant is less deadly if more transmissible, particularly when coming up against the wall of triple-jabbed individuals.

He added: "Further solace was taken from the decision of the Food and Drug Administration to authorise the Pfizer/BioNTech booster shot for 12 to 15 year olds. As such, the impact of the variant on the global economic recovery could yet prove less damaging than had previously been feared."

Mr Hunter said the fourth quarter earnings season will provide an insight into the financial health of the nation.

He added: "In the meantime, the non-farm payroll figure and PMI readings will also inform the shorter term direction of stocks and whether the current views of the Federal Reserve in hiking interest rates are justified. Indeed, having been well communicated some of the monetary tightening may well now have been priced in to stock prices and, in any event, even after the expected hikes interest rates will still be relatively low by historical standards.

"This combination of feelgood factors pushed each of the major indices higher, with the Dow Jones and S&P500 each moving to record closing highs.

"The picture in Asia was more mixed, however. Despite a healthy rise in factory activity in December, the broader concerns of persistent supply chain blockages and higher raw material prices continue to weigh on both the inflationary and the growth outlook in the region."

"In the first trading day of the year, the FTSE100 took its cue from Wall Street with a broad mark-up of stocks. Having finished 2021 ahead by 14.3%, the premier index may also benefit further from the continuing strength of the US dollar, whereby translated earnings become more valuable for its largely overseas-facing constituents."