London's FTSE 100 drops to near three-week low as virus risks weigh

The blue-chip FTSE 100 index fell 0.8 per cent, declining for the third consecutive session, with travel and energy stocks falling the most, while the mid-cap index dropped 1.2 per cent to a one-month low. — Reuters pic
The blue-chip FTSE 100 index fell 0.8 per cent, declining for the third consecutive session, with travel and energy stocks falling the most, while the mid-cap index dropped 1.2 per cent to a one-month low. — Reuters pic

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LONDON, Jan 26 ― British stocks ended lower yesterday, with travel stocks leading the declines, as rising coronavirus infections and extended lockdowns raised worries of prolonged economic pain, while fashion retailers Boohoo and ASOS gained on merger deals.

British Prime Minister Boris Johnson said he was looking at toughening border quarantine rules because of the risk of “vaccine-busting” new coronavirus variants.

The blue-chip FTSE 100 index fell 0.8 per cent, declining for the third consecutive session, with travel and energy stocks falling the most, while the mid-cap index dropped 1.2 per cent to a one-month low.

“Stock markets are crawling between optimism around the rollout of vaccines and worries that a jump in virus infections and fresh local lockdowns could further affect economic recovery prospects,” said David Madden, an analyst at CMC Markets.

Britain has detected 77 cases of the South African variant Covid-19, the health minister said on Sunday while urging people to strictly follow lockdown rules as the best precaution against the country's own potentially more deadly variant.

The FTSE 100 lost 14.3 per cent in value last year, its worst performance since a 31 per cent plunge in 2008 and underperforming its European peers by a wide margin, as pandemic-driven lockdowns battered the economy.

“Once again the optimism generated by the vaccine breakthroughs at the end of 2020 is colliding with the reality of inoculating populations and dealing with the new variants of Covid-19,” said Russ Mould, investment director at AJ Bell.

Online fashion retailers Boohoo and ASOS surged 4.7 per cent and 5.6 per cent, each. Boohoo bought the Debenhams brand, while ASOS was in talks to buy the key brands of Philip Green's collapsed Arcadia group as the Covid-19 pandemic turbocharges the industry's shift to digital.

Recruiter SThree Plc gained 3.5 per cent after its profit, which nearly halved, still managed to beat market expectations and the company said it had resumed dividends. ― Reuters

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