London close: FTSE finishes below 7,000 as 'freedom day' disappoints
London stocks closed well into negative territory on Monday, as worries about rising inflation and the spread of the Delta variant dented sentiment.
The FTSE 100 and the FTSE 250 both closed down 2.34%, at 6,844.39 and 21,940.88, respectively.
Sterling was on the back foot as well, last trading 0.61% lower on the dollar at $1.3683, and weakening 0.55% against the euro to €1.1593.
“Today was supposed to be a landmark day where the UK economy finally shook off the handbrake of Covid-19 restrictions,” said CMC Markets chief market analyst Michael Hewson.
“Instead of a story of vaccine success it has turned out to be, not only a political shambles, but a big market sell-off over concern about the effect rising hospitalisations, along with big increases in the numbers of people self-isolating will have on the recovery story.
“Over the weekend the UK government did its best impression of shooting itself in the foot over its isolation policies, while Delta variant cases have been rising sharply, sparking concern that hospitalisations could rise to a level that might overwhelm the NHS.”
Hewson said much had been made of the fact that UK infection rates were rising at the fastest rate in Europe, and were back at levels last seen in January, but he noted that was likely down to the UK is testing at a much higher rate than was the case seven months ago.
“Only the US and India have conducted more tests, while on a seven-day rolling average, the UK is way out in front of France, who are next,” he said.
“The main concern appears to be that rising infection rates, along with an increase in self-isolation levels, as a result of being pinged by NHS Track and Trace, could stymie the recovery that has been in place since March.
“A lot of hospitality venues are already having to close due to a shortage of staff who are isolating as a consequence of being pinged by the app.”
In equity markets, travel and leisure shares were the biggest losers, with news that fully-vaccinated arrivals from France would still need to quarantine adding extra pressure on the sector.
British Airways owner IAG was down 5.23%, engine maker Rolls-Royce lost 6.51%, catering group Compass slid 3.06%, InterContinental Hotels was off 3.53%, and Premier Inn owner Whitbread was behind 2.98%.
Cineworld, cruise operator Carnival, budget airlines easyJet and Wizz Air, and Upper Crust owner SSP were also all weaker, by 10.07%, 8.27%, 6.58%, 5.34%, and 4.27%, respectively.
Online supermarket Ocado was under the cosh, slipping 1.88% as it faced a week of disruption after a fire at its warehouse in south east London.
“There is the immediate operational impact at Erith with orders being cancelled following the blaze, which was caused by a three-robot crash,” said Neil Wilson, chief market analyst at Markets.com.
“There is reputational risk from cancelling swathes of orders - small I’d say - but nonetheless to be considered.
“But the main thing investors are concerned about is the safety of the technology - will this be repeated?”
Wilson noted that it had only been two years since the company’s Andover facility burned down.
“Will this impact on future deals with international partners?”
Amid the sea of red, AstraZeneca was off 0.4% even after it said that its drug to treat extensive-stage small cell lung cancer had been approved in China.
Spire Healthcare tumbled 7.23% ahead of a shareholder vote on its proposed takeover by Australia’s Ramsay Health Care.
Shareholders Toscafund Asset Management and Fidelity have already made clear that they oppose the deal.
On the upside, waste management firm Biffa managed gains of 2.91% after lifting its full-year earnings expectations, following better-than-expected trading in the first three months of the year.
FTSE 100 - Risers
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,038.00p 3.25%
Pearson (PSON) 822.60p 1.31%
B&M European Value Retail S.A. (DI) (BME) 557.80p 0.50%
Hikma Pharmaceuticals (HIK) 2,633.00p 0.19%
Admiral Group (ADM) 3,287.00p 0.00%
London Stock Exchange Group (LSEG) 7,600.00p 0.00%
Reckitt Benckiser Group (RKT) 6,483.00p -0.03%
Polymetal International (POLY) 1,588.00p -0.09%
SEGRO (SGRO) 1,170.50p -0.21%
Halma (HLMA) 2,765.00p -0.22%
FTSE 100 - Fallers
ITV (ITV) 113.15p -6.64%
Rolls-Royce Holdings (RR.) 87.00p -6.51%
International Consolidated Airlines Group SA (CDI) (IAG) 159.00p -5.23%
St James's Place (STJ) 1,461.00p -4.96%
Lloyds Banking Group (LLOY) 43.50p -4.86%
BP (BP.) 278.45p -4.72%
BT Group (BT.A) 178.15p -4.61%
Intermediate Capital Group (ICP) 1,989.00p -4.47%
Royal Dutch Shell 'A' (RDSA) 1,338.60p -4.32%
Pershing Square Holdings Ltd NPV (PSH) 2,500.00p -4.21%
FTSE 250 - Risers
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,038.00p 3.25%
Biffa (BIFF) 336.00p 2.91%
Centamin (DI) (CEY) 104.45p 1.16%
Ascential (ASCL) 424.20p 0.71%
Pennon Group (PNN) 1,250.00p 0.64%
PureTech Health (PRTC) 326.00p 0.31%
Syncona Limited NPV (SYNC) 215.00p 0.23%
Trainline (TRN) 286.40p 0.21%
Sanne Group (SNN) 823.00p 0.12%
Synthomer (SYNT) 503.00p 0.10%
FTSE 250 - Fallers
Cineworld Group (CINE) 56.60p -10.07%
Carnival (CCL) 1,297.20p -8.27%
Spire Healthcare Group (SPI) 218.00p -7.23%
Tullow Oil (TLW) 43.63p -7.21%
Aston Martin Lagonda Global Holdings (AML) 1,724.50p -7.09%
Rank Group (RNK) 154.60p -6.87%
C&C Group (CDI) (CCR) 205.80p -6.62%
easyJet (EZJ) 770.00p -6.58%
CLS Holdings (CLI) 236.00p -6.35%
Morgan Sindall Group (MGNS) 2,020.00p -6.29%