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(Alliance News) -Â It was a soft start in London on Tuesday as the city, and other parts of southern England, face further virus restrictions this week.
"Economic recovery in the UK has hit a new obstacle as London goes into the most rigid Covid restriction. This means that millions of Londoners are pushed to stay in-door once again, and businesses are going to lose the most critical season of the year," said Naeem Aslam, chief market analyst at AvaTrade.
He continued: "All of this is coming at a time when businesses are fragile, and this last blow may just knock many of them. Yes, it is true that we have coronavirus vaccine in the UK, but the fact is that it will still take a very long time before the vaccine will be available for the general public."
The FTSE 100 index was down 9.94 points, or 0.2%, at 6,521.89 early Tuesday. The mid-cap FTSE 250 index was down 26.95 points, or 0.1%, at 19,737.07. The AIM All-Share index was flat at 1,067.87.
The Cboe UK 100 index was down 0.3% at 649.27. The Cboe 250 was down 0.2% at 17,011.30, and the Cboe Small Companies up 0.1% at 11,249.56.
A new strain of coronavirus has been identified in southern England as tougher restrictions were imposed in London. The capital and parts of Essex and Hertfordshire will face Tier 3 restrictions from Wednesday following "very sharp, exponential rises" in cases.
The Health Secretary said there was nothing to suggest the variant was more likely to cause serious disease, and he suggested the vaccine should still be effective.
London Mayor Sadiq Khan said the decision was "incredibly disappointing" for businesses but urged the capital's residents to follow the rules.
As well as the restrictions on hospitality, the move means people should avoid travelling into or out of the area – potentially depriving Oxford Street and London's other shopping centres of much-needed custom in the run-up to Christmas.
Sterling was down at USD1.3317 early Tuesday from USD1.3340 late Monday after early UK economic data showed the jobless rate edged up in October, though at a slower pace than forecast by analysts.
For the three months to October, the UK unemployment rate was 4.9%, up on the 4.8% recorded for the three months to September though beating expectations, according to FXStreet, of 5.1%. October's reading was 1.2 percentage points higher than a year earlier, the ONS said.
Early estimates for November indicate that the number of payrolled employees fell by 2.7% year-on-year, which is a fall of 781,000 employees. Since February - just before the pandemic gripped the UK - 819,000 fewer people were in payrolled employment.
The claimant count increased slightly in November, the ONS added, to 2.7 million. This represents a monthly increase of 2.5% and has more than doubled since March.
"The pace of the deterioration in the labour market remains surprisingly gradual, though the end to job losses is not yet in sight," said Samuel Tombs at Pantheon Macroeconomics.
The euro traded at USD1.2143 on Tuesday in London, higher than USD1.2130 late Monday.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.2% early Tuesday.
Gold was quoted at USD1,842.79 an ounce early Tuesday, higher than USD1,826.61 on Monday. Brent oil was trading at USD49.83 a barrel, up from USD49.24 late Monday in London.
In Asia on Tuesday, the Nikkei 225 index in Tokyo closed down 0.2%. Against the yen, the dollar edged up to JPY104.09 versus JPY104.00.
In China, the Shanghai Composite ended down 0.1%, while the Hang Seng index in Hong Kong is down 0.7%.
In London, JD Sports shares rose 4.7% after unveiling the acquisition of San Jose, California-based Shoe Palace for USD325 million. Of this consideration, USD100 million has been deferred.
"The acquisition of Shoe Palace complements the group's ongoing positive developments from the existing Finish Line and JD fascias in the United States, which includes the recent opening of JD's flagship store in Times Square, New York," said JD Sports.
For 2019, Shoe Palace delivered a pretax profit of USD52 million on revenue of USD435 million. It has 167 stores and will continue to be run by its founders, though share ideas with JD's other US operation, JD Finish Line.
Airtel Africa fell 19% after JPMorgan Securities said an institutional seller has sold 60 million shares in the Anglo-Indian provider of telecommunications and mobile money services. The shares were sold at 80p each, a 13% discount to Monday's closing price of 92.20p.
Shaftesbury fell 2.9%. The London West End landlord Shaftesbury noted the capital's move to Tier 3 in its annual results on Tuesday, and said it anticipates further measures to support its occupiers will be required as trading conditions will be "severely impacted during the important period" leading up to Christmas and over the New Year.
The property owner noted that the tighter restrictions will have an "adverse impact" on both its hospitality and retail occupiers' ability to trade, and will thus likely hit near-term rent collection.
Shaftesbury reported a net asset value per share of GBP7.43 as at September 30, down 24% on GBP9.82 a year ago. The firm said its portfolio valuation decreased on a like-for-like basis by 18% to GBP3.1 billion over the year.
Shaftesbury reported a pretax loss of GBP699.5 million, swinging from a profit of GBP26.0 million in the prior year.
By Lucy Heming;Â lucyheming@alliancenews.com
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