Europe open: Shares make lacklustre start as rising Covid infections hit sentiment

European shares opened flat 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 028%. Down Jones futures were up 178 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.

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.