Europe midday: Shares slump as UK border chaos, Brexit spook investors
European shares continued their plunge on Monday as investors took flight in response to new border closures by several countries as the UK battled to fight a new strain of the coronavirus and stalled Brexit talks amid the pandemic heightened worries.
The pan-European STOXX 600 index slumped 2.7% after the UK went into lockdown in all but name and descended into chaos after the government performed yet another u-turn and pulled plans to ease curbs over Christmas.
With the discovery of a new strain of the virus up to 70% more transmissible the government shut off London, the South East and East of England at a time when millions planned to travel for the Christmas holidays.
Train stations witnessed panicked scenes on Saturday as people fled the capital ahead of the new restrictions taking effect on Sunday.
Several countries ordered a suspension of travel to the UK, including Canada, Italy, Denmark Germany and the Netherlands. France imposed a ban that included all freight carriers, sparking fears of food shortages.
The UK’s FTSE 100 index was down 2%, with the pound slumping 1.9% against the dollar and 1% versus the euro.
Travel stocks were battered by the latest Covid-19 news, with easyJet plummeting by 9%, cruise line operator Carnival 8.5%, holiday firm TUI 6%, Trainline 8.5%, and travel outlet food provider SSP down 5.7%. Aircraft engine maker Rolls-Royce was 7.15% lower.
Oil prices also slumped on fears that the recovery in demand could be further delayed. Shares in major producers took a hit with shares Total, BP, and Royal Dutch Shell all lower.
Shell was also in focus after saying it was writing down $3.5bn to $4.5bn in the value of its oil and gas assets next year as it assessed the current impact of the coronavirus pandemic on fourth quarter operations.
Online supermarket Ocado and Just Eat Takeaway - both of which have benefitted from Covid restrictions and lockdowns - were the top gainers