Europe open: Shares open mixed on UK lockdown, US election

European shares made a mixed start to the as proposed new lockdown measures in the UK and the looming US elections weighed on investors.

The pan-European Stoxx 600 index was up 0.18%, with the UK’s FTSE 100 down by 0.17%. The British government has proposed a four week lockdown from Thursday, subject to parliamentary approval in a vote on Wednesday. Italy, Spain, Ireland, France, Belgium, Greece and Germany have already imposed measures.

UK stocks featured heavily in the main movers list, reflecting the fortunes of those sectors likely to benefit or suffer from the new lockdown.

Markets.com analyst Neil Wilson said that lockdowns across Europe seemed fully discounted adding that "markets haven’t really reacted massively to the UK government’s caprice".

"Stocks hugged the flatline in early trade Monday as all eyes shift now to the presidential election, with some bid actually coming through after the initial downtick. The elephant in the Oval Office is Donald Trump: a victory in the election this week for the incumbent would surprise just about everyone," he said.

"I say this since strategists everywhere seem to be discounting the possibility. Some of the pre-election selling we have seen could be more about an expected Biden win and what that would do to tax and regulation. Polls show a healthy Biden lead for sure but are tighter in the battleground states."

Travel and leisure-related stocks were in the red, with British Airways parent IAG, Premier Inn owner Whitbread, engine maker Rolls-Royce, transport operator National Express, budget airline easyJet, Cineworld and pub chains Wetherspoons and Mitchells & Butlers all lower.

Ryanair shares fell after the Irish budget carrier said it lost €226m in the third quarter. Travel food operator SSP was lower, along with Trainline and holiday company TUI.

Retailers were also weaker, with JD Sports and Next both down, while Primark owner Associated British Foods was under the cosh after saying it expects to lose £375m in sales as new Covid-19 lockdowns across Europe forced the closure of its stores.

Ladbrokes owner GVC lost ground after it warned that core earnings could fall by up to £43m as new coronavirus restrictions were imposed on its European shops.

Shares of outsourcer Serco tumbled after it lost a Ministry of Defence contract to provide nuclear warheads but reiterated its full-year guidance.

Ocado rallied as the online supermarket increased its guidance for annual earnings to more than £60m from more than £40m as consumers switch to online shopping – a trend that looked likely to continue towards Christmas. The company also agreed to buy Kindred Systems, a piece-picking robotics company, for about $262m and robotic arm designer Haddington Dynamics for $25m.

Just Eat Takeaway was a high riser amid expectations that people will be ordering in food more once the second lockdown takes effect this week.

(Michele Maatouk also contributed to this report)