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Lockdown fears hit travel, hotel and pub shares | Lockdown fears hit travel, hotel and pub shares |
(32 minutes later) | |
Leading shares across Europe have fallen sharply in morning trading amid fears that a renewed rise in coronavirus cases will blight economic prospects. | Leading shares across Europe have fallen sharply in morning trading amid fears that a renewed rise in coronavirus cases will blight economic prospects. |
In London, the benchmark FTSE 100 share index was down more than 3%, with airlines, travel firms, hotel groups and pubs leading the rout. | In London, the benchmark FTSE 100 share index was down more than 3%, with airlines, travel firms, hotel groups and pubs leading the rout. |
Worst hit was British Airways owner IAG, which slumped more than 12%. | Worst hit was British Airways owner IAG, which slumped more than 12%. |
Similar falls were seen on markets in Paris, Frankfurt and Madrid. | Similar falls were seen on markets in Paris, Frankfurt and Madrid. |
Banking shares were affected by an extra set of concerns as allegations of money-laundering surfaced in leaked secret files. | Banking shares were affected by an extra set of concerns as allegations of money-laundering surfaced in leaked secret files. |
HSBC, the bank at the centre of the scandal, saw its share price fall more than 5% in London, but the revelations dragged down the entire sector, with Barclays, Lloyds and NatWest all dropping about 6%. | HSBC, the bank at the centre of the scandal, saw its share price fall more than 5% in London, but the revelations dragged down the entire sector, with Barclays, Lloyds and NatWest all dropping about 6%. |
The downward trend affected all but a handful of stocks on the UK's 100-share index. Only online delivery service Just Eat, supermarkets Tesco and Ocado and miner Fresnillo made it into positive territory. | The downward trend affected all but a handful of stocks on the UK's 100-share index. Only online delivery service Just Eat, supermarkets Tesco and Ocado and miner Fresnillo made it into positive territory. |
The FTSE 250 index, seen as a better reflection of the health of the UK economy, was down 4% by lunchtime. | |
Its biggest faller was pub and restaurant owner Mitchells & Butlers, which dropped more than 13% as concerns grow that the hospitality industry would have most to lose from a fresh lockdown. | |
The pound also lost ground against the dollar, falling 0.58% to $1.2848. It fell marginally against the euro to €1.0902. | The pound also lost ground against the dollar, falling 0.58% to $1.2848. It fell marginally against the euro to €1.0902. |
'Bitter pill' | |
Coronavirus cases have been surging in many European countries, as governments strive to avoid another round of national lockdowns. | Coronavirus cases have been surging in many European countries, as governments strive to avoid another round of national lockdowns. |
In the UK, top scientists are warning that the country is at a "critical point" in the pandemic and "heading in the wrong direction". | In the UK, top scientists are warning that the country is at a "critical point" in the pandemic and "heading in the wrong direction". |
Prime Minister Boris Johnson is understood to be considering a two-week mini-lockdown in England - being referred to as a "circuit-breaker" - in an effort to stem widespread growth of the virus. | Prime Minister Boris Johnson is understood to be considering a two-week mini-lockdown in England - being referred to as a "circuit-breaker" - in an effort to stem widespread growth of the virus. |
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ''The FTSE 100 is worst hit among its European peers with a storm of pessimistic news swirling, affecting sectors across the board." | |
She added that concerns for the travel industry had had a "domino effect", with aircraft engine manufacturer Rolls Royce hit, as investors saw no end to the falling demand for new planes. | |
At the same time, the prospect of evening coronavirus curfews, after a summer of recovering sales, was "a bitter pill to swallow" for the hospitality industry, | |
If you add the prospect of a no-deal Brexit into the murky mix, there is little surprise so many investors seem to have caught a severe case of the jitters today.'' |