FTSE 100 closes at three-week low as ministers mull hotel quarantine for arrivals
The FTSE 100 fell to a three-week low today as ministers mull placing tougher restrictions on people entering the UK from overseas in a bid to control the spread of the coronavirus.
The blue-chip FTSE 100 index fell 0.8 per cent by the close, 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.
It follows two cautious weeks on the capital’s markets, which traders abandoning the optimism with which they started the year on the back of more coronavirus restrictions.
Ministers met today to discuss whether to force incoming travellers to quarantine in hotels, which the Times reported Chancellor Rishi Sunak was now in favour of.
A decision on which measures are to be implemented is expected tomorrow, but Boris Johnson this morning said that hotel quarantine was being “actively considered”.
British Airways owner IAG was the biggest faller, dropping 7.6 per cent by the end of the day.
On the FTSE 250, Easyjet also fell 6.6 per cent amid fears for the fate of the UK’s airlines among the endless lockdowns.
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.
This week, talks over President Joe Biden’s $1.9 trillion stimulus package are set to begin, with traders waiting to see whether he can get Congress to agree to the full amount.
Michael Hewson, head of markets at CMC Markets, said: “Rumblings are already being heard from both sides of the political aisle that could see the final amount cut by almost half to around $1trn, as some Republicans push back on certain aspects of the deal.”
But enthusiasm over the deal was enough to lift Asia’s markets back to record heights overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose to 726.46, within touching distance of last week’s record high of 727.31.
The benchmark is up nearly 9 per cent so far in January, on track for its fourth straight monthly rise.
Japan’s Nikkei rebounded from falls in early trading to be up 0.7 per cent, while the Hang Seng jumped 2.4 per cent.