European markets fell on Monday as investors monitored a new rapid spread of coronavirus that closed much of the UK
The pan-European Stoxx 600 fell by 1.8% in early trade, with travel and leisure stocks falling by 4% to make up for losses. All major sectors and stock markets slipped into negative territory.
Traders are nervously following the new Covid mutation in the UK, which has led to a severe blockade in London and other parts of the south-east of England and a change in the way households mix over the Christmas holidays.
The variant is considered to be up to 70% more transmissible than the original strain of the disease. The World Health Organization has said it has so far been identified in Denmark, the Netherlands and Australia.
It has led to several countries in Europe and elsewhere blocking travel in the UK. France, Germany, Italy, Ireland and the Netherlands have banned all flights in the UK, as have Canada and Israel.
The situation could further complicate talks on Brexit. The UK and the European Union remain stuck in post-Brexit trade relations as the deadline of 31 December approaches, with disputes over issues such as fisheries affecting negotiations.
The pound fell sharply against the dollar, falling 1.7% to about $ 1.33.
In Asia, stocks traded mixed, as the coronavirus situation in parts of North Asia – such as Japan and South Korea – remains serious.
Meanwhile, the future of the United States has been flat after Congress reached an agreement on a $ 900 billion coronavirus stimulus package. MPs will vote on the aid and funding bill on Monday.
In terms of data, figures for euro area consumer confidence are due to be published at 15:00, London time.
Travel stocks suffer
IAG, the mother of British Airways, fell 13.5% in early trade to lead a broad decline for airlines and travel companies.
Cruise operator Carnival fell 8.8%, while Tui, Lufthansa and Rolls-Royce fell more than 7%.