LONDON: London's FTSE 100 fell to a near-two week low on Thursday as concerns over new coronavirus restrictions and Brexit-related uncertainty prompted investors to book profits after a rally earlier in the month. After slumping as much as 2.5% during the session, the blue-chip index closed down 1.7% to mark its biggest daily decline since late September, with energy, insurance and mining stocks leading declines.
The mid-cap FTSE 250 fell 0.6% with London set to enter a tighter Covid-19 lockdown from midnight on Friday as Prime Minister Boris Johnson seeks to tackle a swiftly accelerating second coronavirus wave. Pub operator Marston's Plc shed 1.4% as it announced job cuts due to the tiered-restrictions.
In company news, recruitment agency Hays Plc fell 1.3% after posting a 29% drop in its first-quarter net fees due to the coronavirus crisis. Business supplies distributor Bunzl Plc and Britain's biggest retailer Tesco Plc lost 2.4% and 3% in ex-dividend trading.
However, AO World Plc surged 30.7% after the online electricals retailer said it expect a 57% increase in first-half revenue on strong consumer demand during the Covid-19 pandemic.
"The issue is what it will actually do to the economy, and the fact that the UK is sort of backtracking on the progress that's been made is not a good sign for the economic recovery," said Greg Swenson, founding partner of Brigg Macadam, a London-based investment bank.
After tracking gains in global equities for two straight weeks on hopes of more US stimulus, UK stocks have also come under pressure this week as a Brexit trade deal remains elusive.
European Union leaders agreed to extend Brexit trade talks for few weeks on Thursday, but also called for no-deal preparations should the troubled negotiations fail.
"Markets don't like uncertainty and the fact that a no deal Brexit is looking like a possibility here is not good," Swenson said.
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