(Alliance News) - London stocks slumped at the start of the week, with worries over the Delta coronavirus variant causing travel and oil stocks to weigh on the FTSE 100.
"The last week of the month and quarter has started on a quiet note for data as there's nothing significant scheduled for Monday. But from Tuesday onwards things will start to pick up. The week features a handful of potentially market-moving events, with US non-farm jobs report being the pick of the lot," said Fawad Razaqzada, market analyst at ThinkMarkets.
The FTSE 100 index closed down 63.10 points, or 0.9%, at 7,072.97. The FTSE 250 ended down 112.59 points, or 0.5%, at 22,533.42, while the AIM All-Share closed up 0.94 of a point, or 0.1%, at 1,251.24.
The Cboe UK 100 ended down 0.9% at 703.91, the Cboe UK 250 closed down 0.5% at 20,214.21, and the Cboe Small Companies ended down 0.1% at 15,370.57.
In European equities on Monday, the CAC 40 in Paris tumbled 1.0%, while the DAX 30 in Frankfurt ended down 0.3%.
"European markets have got off to a poor start to the week, as rising virus cases threaten to undermine sentiment as we come to the end of the month, the end of the quarter and the first half of 2021," said Michael Hewson, chief market analyst at CMC Markets.
Travel stocks were amongst the biggest fallers in London at the start of the week, with British Airways parent International Consolidated Airlines falling 5.9% and jet engine maker Rolls-Royce Holdings falling 5.6%. Mid-cap easyJet fell 5.8% and budget airline Ryanair fell 3.4%.
The travel sector was dealt another blow after Portugal, Spain, Malta and Hong Kong announced new restrictions on UK tourists amid growing concern over the Delta variant.
The Portuguese government imposed a mandatory 14-day quarantine requirement on arrivals from the UK who are not fully vaccinated. This puts UK holidaymakers in the same risk category as those from South Africa, Brazil, India and Nepal. Previously, UK visitors were exempt from quarantine if they had evidence of a recent negative coronavirus test.
Meanwhile, Malta will be added to the UK's green list on Wednesday, but the central Mediterranean country announced that from that day it would only permit UK visitors who were fully vaccinated. The Spanish authorities are introducing new restrictions on UK visitors to the Balearic Islands, which include Ibiza and Mallorca.
The Times reported that German Chancellor Angela Merkel wants the EU to ban all UK travellers from entering the bloc.
CMC's Hewson commented: "While airlines and travel companies expressed disappointment over last week's announcement criticising the government for its cautious approach, the reality is whatever countries the government puts on its green list now matters less than the restrictions being faced by UK passengers when they leave the UK for their destination country."
Lufthansa shares fell 3.6% in Frankfurt while Air France KLM fell 4.8% in Paris.
The travel industry setback comes as UK Prime Minister Boris Johnson dismissed the possibility of ending coronavirus restrictions early by saying it is "sensible" to stick with the planned "terminus" date of July 19, after talks with his new Health Secretary Sajid Javid.
The prime minister said on Monday that England was "set fair" to be free of lockdown measures and back to normality "as far as possible" by the later date he set when previously delaying his plans by four weeks due to the surging Delta variant.
Sterling slipped below the USD1.39 mark. The pound was quoted at USD1.3884 at the London equities close Monday, lower compared to USD1.3910 at the close on Friday.
Concerns over variants also saw oil prices soften on Monday, with Brent quoted at USD75.32 a barrel at the London equities close Monday from USD75.81 late Friday. Traders are also looking ahead to Thursday's OPEC meeting.
This resulted in BP shares closing 3.2% lower and Royal Dutch Shell 'A' and 'B' shares shedding 3.4% and 3.6% respectively.
The worst performer in the FTSE 100 on Monday was Burberry, shares diving 8.7% on news of the departure of Chief Executive Marco Gobbetti, who set to join rival luxury goods maker Salvatore Ferragamo.
Gobbetti has been at the helm of Burberry since July 2017, during which he "led the transformation of Burberry's brand and business", the London-based company said. He is expected to remain in his current role until the end of 2021, while Burberry searches for a successor.
During his time at the company, Gobbetti switched its strategy away from discounts towards well-marketed, full-price items. Its share price had jumped 37% from when he joined to Friday's close.
Burberry Chair Gerry Murphy said: "The board and I are naturally disappointed by Marco's decision but we understand and fully respect his desire to return to Italy after nearly 20 years abroad."
Shares in Salvatore Ferragamo gave back early gains to close 2.7% lower in Milan.
It was a good session for AstraZeneca, meanwhile, which gained 2.0% to finish at the top of the FTSE 100 as new research showed a third shot of the Oxford-AstraZeneca vaccine could be an effective booster jab without the need for tweaks.
An Oxford University study found that giving people a third dose more than six months after their second led to a substantial rise in antibodies and increased the body's T-cell ability to fight coronavirus, including its variants. Andrew Pollard, head of the Oxford Vaccine Group, said it is not yet known whether people will need a booster shot in the autumn but the new data shows the existing vaccine could be effective.
Stocks in New York were mixed at the London equities close, with the Dow Jones down 0.6%, the S&P 500 index down 0.1%, and the Nasdaq Composite up 0.7%.
While the dollar gained against the pound, it was mixed against other major currency pairings.
The euro stood at USD1.1932 at the European equities close Monday, soft against USD1.1945 at the same time on Friday. Against the yen, the dollar was trading at JPY110.53, down compared to JPY110.75 late Friday.
Gold was quoted at USD1,779.56 an ounce at the London equities close Monday, down against USD1,781.20 at the close on Friday.
Tuesday's international economic calendar has Japanese unemployment and retail trade overnight, while UK Nationwide house prices are at 0700 BST and eurozone consumer confidence due 1000 BST, followed by German inflation at 1300 BST.
The UK corporate calendar on Tuesday has a trading statement from energy services provider Hunting and full-year results from Lamprell and D4t4 Solutions.
By Lucy Heming; lucyheming@alliancenews.com
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