Europe open: Shares start week lower as Covid cases rise

European shares opened the first session of the week lower, as fears over the growing number of coronavirus cases dampened sentiment.

The pan-European STOXX 600 index was down 0.57%, with Germany’s DAX down 0.98% as Germany reported an increase in coronavirus cases. London’s FTSE was off by 0.42% with the government considering even tougher restrictions to deal with a surge driven by a UK variant and an unwillingness by Britons to obey lockdown rules,

In the US, Dow Jones future were down 195 points as investors digested last week’s storming of the Capitol building in Washington by a mob incited by soon-to-be-former President Donald Trump.

“Things could get worse this afternoon if Europe takes its cues from the US. The Dow Jones is heading for a 0.5% drop, one that would knock it below its 31,000 milestone. Part of that will be a natural reaction to its recent record-breaking gains; and part of it will come from anxiety over the tinderbox political situation domestically,” said Spreadex analyst Connor Campbell.

“The Democrats are moving to try and impeach Donald Trump before Joe Biden’s inauguration on January 20, and while that won’t have too much of an effect on actual governance – something Trump hasn’t been interested in since November anyway – it is indicative of an unstable, and potentially violent, few months in America.”

In equity markets, Signature Aviation soared to top the gainers surged after Gatwick Airport co-owner Global Infrastructure Partners has swooped to buy the company for $4.63bn (£3.43bn), beating a rival offer from private equity outfit Blackstone Group and Microsoft founder Bill Gates.

Smith & Nephew lost ground after the medical technology company said it expects to report a 7% decline in fourth-quarter underlying revenue and a 12% drop in full-year revenues, as more medical procedures are postponed due to rising numbers of coronavirus infections.

Ladbrokes owner Entain was in the red after its chief executive quit, with the company a takeover target for MGM Resorts International.

Travel and leisure stocks also took a hit amid the prospect of tighter restrictions with TUI lower.

JD Sports rallied after the company said it was confident headline pre-tax profit for the year to January 30 will be "significantly" ahead of current market expectations of around £295m as demand has remained robust throughout the second half.