“Freedom day,” the term used by the U.K. government to describe the lifting of coronavirus-related restrictions in England, turned out to be a rough session for U.K. equities on Monday.
The FTSE 100
dropped 2.7% in late-afternoon trade, putting the benchmark index on track for the worst session since Sept. 21, when it sank 3.4%.
The selling wasn’t unique to the U.K., with equities in the U.S.
“Today was supposed to be a landmark day where the U.K. economy finally shook off the handbrake of COVID-19 restrictions. Instead of a story of vaccine success it has turned out to be, not only a political shambles, but a big market selloff over concern about the effect rising hospitalizations, along with big increases in the numbers of people self-isolating will have on the recovery story,” said Michael Hewson, chief market analyst at CMC Markets UK.
The U.K. over the weekend introduced new travel restrictions on France, and U.K. Prime Minister Boris Johnson agreed to self-isolate after making contact with health minister Sajid Javid, who contracted coronavirus. Many workers in the U.K. hospitality industry have been forced to isolate after being pinged by the trace-and-test app.
“COVID has returned to the front burner of investor concerns right now,” added David Donabedian, chief investment officer of CIBC Private Wealth, U.S.
The biggest FTSE 100 decliner was broadcaster ITV
with engine maker Rolls-Royce
and British Airways owner International Airlines Group
also seeing steep decliners.
Just Eat Takeaway
was one of the few advancers, buoyed by hopes that the spreading coronavirus will keep customers at home requesting delivered food.