Europe midday: Shares struggle to make gains as Covid worries mount

European shares were struggling to make headway on Tuesday as Covid-19 restrictions were increased across the continent, offsetting investor optimism over vaccine programmes and the confirmation of Joe Biden’s US presidential election win.

The pan-European Stoxx 600 index crept into positive territory, up 0.08%. Down Jones futures were up 173 points.

Despite trumpeting the world’s first coronavirus vaccinations last week, the UK government was forced to face reality after a new variant of the infection was identified in London, and was thought to have contributed to increased infection rates, forcing the capital into the highest tier of restrictions.

In Italy, media reported the government could put the country under partial lockdown from Christmas eve to at least January 2, while in France Covid-19 hospitalisations rose for the third day, just as the country planned to relax its lockdown.

UK sentiment was further hit as Britain’s jobless rate rose again in the three months to October and redundancies reached a record high.

The unemployment rate reached 4.9%, up from 4.8% in the three months to September, its highest in more than four years, according to official data.

Redundancies reached a record high of 370,000 from August to October period, although it fell in October, the Office for National Statistics said.

"The UK labour market is showing additional signs of weakness as it seems that employers trimmed their headcounts even though the furlough scheme, which was supposed to end in late October was extended until March," said CMC Markets analyst David Madden.

In equity news, JD Sports Fashion led the gainers, up almost 6% after the company said it was buying US-based Shoe Palace for $325m along with an equity share in the enlarged group for the company’s founders.

Computer games maker CD Projekt regained some ground lost on Monday after it apologised for glitches in its long-awaited Cyberpunk 2077, which stars Keanu Reeves, on last generation consoles like the PS4 and Xbox One.

CD Projekt Red says it "should have paid more attention to making it play better" on those consoles and offered refunds to people who want to return the game.

Rolls-Royce shares fell after a downgrade to ‘sell’ at Panmure Gordon.