Markets drop amid worries of travel restrictions

25 January 2021, 17:44

Coronavirus – Mon Jan 25, 2021
Markets drop on worries over new restrictions. Picture: PA

The news in London was dominated by online challengers Asos and Boohoo snapping up, or planning to snap up, older high street brands.

Global markets drifted lower on Monday amid worries that governments are considering new restrictions to slow the spread of Covid-19.

London’s FTSE 100 closed the day down 56.22 points to 6638.85, a 0.8% drop.

The index, which includes some of the biggest companies in the UK, has been on a steady downward trajectory since getting a major bounce at the beginning of the year amid vaccine optimism and Democrat wins in US senate elections.

The index ended 2020 at 6,472 points but reached as high as 6,882 after only four days of trading in 2021.

“Concerns that additional and stricter restrictions will prolong the economic rebound in the wake of the pandemic are weighing on market confidence,” said CMC Markets analyst David Madden.

“It is believed that Britain will tighten rules in relation to people flying into the country. France already has a countrywide curfew in place and there is growing talk a third national lockdown will be introduced.”

In the US by the later afternoon in Europe, the S&P 500 had dropped by 0.3% and the Dow Jones was trading down 0.6%. The two main EU indexes, the Dax and Cac, fell by 1.7% and 1.6% respectively.

Sterling lost 0.1% and buys 1.3666 dollars, but rose 0.2% to buy 1.126 dollars. Brent crude oil stayed fairly still at 55.45 dollars per barrel.

Debenhams administration
Boohoo has bought the Debenhams brand for £55 million (Kirsty O’Connor/PA)

The business news from London’s listed companies was dominated by two online retailers – Asos and Boohoo.

The news that Boohoo has bought the Debenhams brand and website for £55 million is unlikely to save many of the 12,000 jobs at Debenhams, many of which are linked to the company’s 118 stores, which will close for good. Boohoo’s shares jumped 4.7%.

Asos, meanwhile, saw its shares rise 5.6% after it confirmed it was in exclusive talks with administrators to buy brands such as Topshop and Miss Selfridge from Philip Green’s Arcadia.

Cineworld’s shares rose 4.4% after 70% of its shareholder votes were cast in favour of the company’s new bonus scheme. The scheme could hand chief executive Mooky Greidinger around £65 million.

National Grid’s investors seemed unconcerned by a recommendation from energy regulator Ofgem that the Government should carve out the responsibility for operating the electricity system out from the company. Shares rose 1.4%.

The best news of the day seemed to be from H&T as the pawnbroker reported it was set to beat profit targets for last year, amid an economic slowdown. Shares rose 9.3%.

The biggest risers on the FTSE 100 were Reckitt Benckiser, up 280p to 6554p, Ocado, up 64p to 2754p, Severn Trent, up 51p to 2391p, United Utilities, up 19.8p to 952.6p, and Scottish Mortgages, up 27p to 1306p.

The biggest fallers on the FTSE 100 were IAG, down 11.6p to 140p, Melrose, down 9.75p to 165.7p, Compass Group, down 73p to 1321.5p, Rolls-Royce, down 4.95p to 98p, and Informa, down 23p to 492.8p.

By Press Association