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By Joice Alves
LONDON, July 19 (Reuters) - It's "Freedom Day" as England
marks the end of COVID-linked curbs, but with soaring infections
expected to dampen summer trade, tourism and leisure shares are
back to where they were last November during the second national
lockdown.
From midnight, laws requiring masks to be worn in English
shops and other indoor settings lapsed, along with capacity
limits in bars and restaurants, and rules limiting the number of
people who can socialise together.
The curbs ended even as UK infections approached 50,000 a
day and Prime Minister Boris Johnson was forced into
self-isolation after health minister Sajid Javid tested positive
for COVID-19.
On Monday, the FTSE 350 travel and leisure index
sank 3.6% to its lowest since Nov. 23 and
companies that might have been expected to reap the benefits of
reopening were among the day's biggest losers.
The moves show "investors think the reopening trade is now a
dud", said AJ Bell analyst Russ Mould.
He was referring to the bets investors had placed on sectors
such as hospitality, expecting them to gain from Britain's
blistering vaccination pace, which would allow people to travel,
dine out and socialise before other European countries.
But UK-listed shares of cruise operator Carnival Plc <CCL.L,
and airlines easyJet and British Airways-owner IAG
fell between 5% and 10%, reversing some of the gains
they had notched up earlier this year.
Shares in Restaurant Group, which operates outlets
such as Wagamama and Frankie & Bennie's, fell as much as 5.2%
while Cineworld stocks were down around 10%.
"The airlines, restaurants and leisure companies may not get
the strong summer trading they've long hoped for," Mould added.
The sell-off coincides with a broader risk-off wave, with
bond yields plumbing multi-month lows and world stocks facing
their longest losing streak since the pandemic first hit.
British losses weighed on euro zone counterparts, which fell
3.7%.
The British government argues that while 48,161 new cases of
COVID-19 were recorded on Sunday, deaths and hospitalisations
remain under control. But analysts drew parallels with last year
when just before Christmas, Johnson announced a third national
lockdown after initially wavering.
"The final removal of COVID restrictions (is) doing more to
raise fears of a more pronounced outbreak than raise hopes
around an economic boost," said Joshua Mahony, senior market
analyst at IG.
Data from investment bank Jefferies, based on its
proprietary consumer behaviour gauges, showed UK retail and
recreational mobility declining from June while cinema search
interest too was down.
AJ Bell's Mould called it "a reality check", as more Britons
become infected or have to self-isolate. This is weighing
heavily on hospitality firms, where 20% of staff are isolating,
according to the Confederation of British Industry.
Jefferies said however it was positive on some leisure
segments, suggesting Cineworld and The Restaurant Group as
shares with potential upside. "Consumer re-engagement and
pent-up demand" would still be supportive factors, it argued.
(Reporting by Joice Alves; Editing by Sujata Rao and Giles
Elgood)
