Europe close: Travel stocks slump as UK hit by new Covid travel bans

European shares finished Monday in depressed mood as travel stocks slumped in response to harsher Covid-19 curbs in England and travel bans from several countries to protect their borders.

The pan-European STOXX 600 index fell 2.3% after the UK went into lockdown in all but name and descended into chaos after the government performed the latest in a seemingly endless line of u-turns and pulled controversial plans to ease curbs over Christmas.

London’s FTSE100 fell 1.73%, while the German DAX plunged 2.82%. The travel crisis also brought the ongoing Brexit stalemate into sharp focus as the UK rejected any suggestion of extending the transition period in which a trade deal with the EU can be agreed.

With the discovery of a new strain of the virus up to 70% more transmissible the government shut off London, the South East and East of England at a time when millions planned to travel for the Christmas holidays.

Train stations witnessed panicked scenes on Saturday as people fled the capital ahead of the new restrictions taking effect on Sunday.

Several countries ordered a suspension of travel to the UK, including Canada, Italy, Denmark Germany and the Netherlands. France imposed a ban that included all freight carriers, sparking fears of food shortages.

The pound slid 1.35% against the dollar and 1.09% versus the euro.

Travel stocks were the obvious candidates for a battering by the latest Covid-19 news, with easyJet plummeting by 7.2%, cruise line operator Carnival 5.58%, holiday firm TUI was down 6% at one point before recovering to be 1% off, Trainline fell 10%, and travel outlet food provider SSP was 3% lower. Aircraft engine maker Rolls-Royce rimmed losses to be 3.25% lower.

Oil prices also slumped on fears that the recovery in demand could be further delayed. Shares in major producers took a hit with shares Total, BP, and Royal Dutch Shell all lower.

Shell was also in focus after saying it was writing down $3.5bn to $4.5bn in the value of its oil and gas assets next year as it assessed the current impact of the coronavirus pandemic on fourth quarter operations.