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London markets tumble on imminent circuit breaker lockdown concerns

london capital and finance
The capital’s premier FTSE 100 index slid 2.21 per cent to 7,109.19 points, while the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, plunged 1.98 per cent to 22,230.23 points

London markets tumbled today on concerns fresh restrictions to curb the spread of Omicron are about to hit England.

The capital’s premier FTSE 100 index slid 0.99 per cent, closing at 7,198.03 points, while the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, finished 1.01 per cent lower at 22,549.88 points.

Speculation that the UK government is preparing to launch a two-week to a month circuit breaker lockdown to crush the spread of the Omicron variant of coronavirus whacked market sentiment.

However, Prime Minister Boris Johnson, emerging after a two-and-a-half-hour cabinet meeting, confirmed no new measures will be implemented today, but stressed the UK government is prepared to launch fresh curbs if needed.

Reports emerged this morning indicating civil servants have drawn up three scenarios for the UK government to consider, one of which includes mandating curbs on household mixing, the return of social distancing and forcing pubs and restaurants to close.

A full-blown lockdown has also been touted.

This morning, deputy prime minister Dominic Raab refused to rule out that there would be a Christmas lockdown.

“It is always hoped that the end of the trading year provides a little boost for investors; or a Santa Clause rally to eke out a few extra gains before the Christmas holidays,” said Stuart Clark, portfolio manager at Quilter Investors.

“But markets are only giving investors a lump of coal this Christmas,” he added.

Travel stocks and commodity giants led the FTSE 100 lower today as investors poured out of the sectors on fears they will fall prey to a sharp drop in demand under tighter restrictions.

Miners Antofagasta and Frenillo dropped more than 3.10 per cent, while oil megacap BP, which represents an enormous share of the FTSE 100, fell 3.13 per cent after oil prices collapsed.

Aerospace engineer Rolls Royce closed 3.34 per cent lower, while travel agent and airline Tui lost 0.60 per cent.

The pound fell sharply against the greenback, weakening 0.20 per cent to $1.3214.

Across the pond, Wall Street’s main indexes plunged during opening exchanges.

The Dow Jones fell 1.85 per cent, while the S&P 500 lost 1.73 per cent.

The tech-heavy Nasdaq plunged 1.78 per cent.