UK shares were subdued on Thursday, after hitting 22-month highs in the previous session, as a surge of COVID-19 cases offset optimism around a "Santa Claus rally" in thin year-end trading.
The FTSE 100 was flat, with financial and energy stocks weighing on the benchmark index, while the domestically focussed mid-cap index lost 0.1% on weaker travel and leisure stocks.
The UK reported a record 183,037 COVID-19 cases on Wednesday, over 53,000 more than the previous high registered just a day earlier, with the Omicron variant accounting for 90% of all community infections.
Diversified financial stocks, including London Stock Exchange, fell 1.6% in morning trade, while life insurance stocks declined 0.2% on the FTSE 100.
Oil majors BP and Royal Dutch Shell fell nearly 0.2% each after top consumer China cut import quotas.
The benchmark FTSE 100 has gained 14.8% so far this year and is heading for its best annual performance in 12 years despite concerns around the new Omicron COVID-19 variant.
Industrial stocks have outperformed the FTSE 100 and the FTSE 250 this year, gaining 32.6% and on track for their best yearly performance since 1998. Ferguson, Pagegroup, Diploma and Mitie group have added more than 50% this year.
"There has been a cracker of a performance this year from companies which have shared on the spoils of reopening after the pandemic," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
"As demand bounced back for commodities and industrial components, chemicals and services, companies like Ashtead, Glencore and Meggitt and Croda International have been pushed to the top of the FTSE 100 leader board this year"
Rental equipment provider Ashtead Group has surged 77% so far this year, leading the gains on the FTSE 100 index.
UK markets will close early on Friday for the New Year's Eve holiday.
