The London stock market fell 1.8% in early trading in sharp sales with investors reacting to the new lockout restrictions, a new strain of coronavirus and a halt to Brexit talks.
The FTSE 100 index, London’s blue-chip index, fell 117 points to 6,410 points when it opened on Monday. The big losses come as Brexit talks stay in limbo, France bans accompanying goods for 48 hours, and a new strain of coronavirus appears in the UK.
The new pressure – now thought to be up to 70% more mobile, but not more lethal – has sent a wave of countries banning travel from the UK.
The pound was also hit, falling 1.8% against the US dollar, to $ 1.32, and 1% against the euro, at € 1.09.
International Airlines Group, owner of British Airways, was the largest carrier on the FTSE 100, down 16%, followed by jet engine maker Rolls-Royce, which fell 9%. Tui travel agency fell 7% and Carnival, the cruise ship company fell 9%.
Banks, which are heavily exposed to the UK economy, were also hit. Shares in Lloyds Banking Group, the largest lender on the street, fell 6% and Barclays was down 5%.
Losses were seen across Europe – in Germany, the Dax lost 1.9%, Cac 40 France fell 2.4% and Ibex Spain lost 2.8%. Shares in aircraft maker Airbus fell nearly 5% and there was a loss for Accor Hotels and French airports company ADP.
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“The new strain of coronavirus places great emphasis on feeling the UK’s remoteness from Europe is becoming increasingly physical as well as conceptual,” said Richard Hunter, head of marketing at Interactive Investor. “Against this background, investors are much more likely to commit new capital to the market, especially in the last few trading days of the year. ”
Grant Shapps, the UK’s transport secretary, has called for the UK not to extend the Brexit transition period beyond 1 January, despite chaos at UK ports and the new level of coronavirus crisis.
However, he said there will be “major disruption” in Dover and that supermarket supply chains are very strong. Shapps added that short-term stress is not a particular problem; the question is how long it lasts.