LONDON: U.K. travel, leisure and retail shares slid on Monday after several countries closed their borders with Britain due to the spread of a mutated version of the coronavirus, and the government announced new social restrictions. Stay-at-home stocks, meanwhile, got a boost.
Airlines that were expecting a lift around the festive period were among the worst hit, with British Airways-parent International Consolidated Airlines Group S.A. falling 14% and Easyjet Plc down 17%.
Ryanair Holdings Plc, which has already said free flight changes or refunds will be offered to customers where European Union governments have banned travel, slid 7.6%.
Domestic rail and bus operators also fell as millions of Britons cancel Christmas travel plans: FirstGroup Plc dropped 9.2% and Go-Ahead Group Plc lost 12%.
Adjustments to the U.K.’s tiering system mean household mixing in London and large parts of the southeast are now banned, with socializing restricted to just Christmas Day across the rest of England.
The measures are a fresh blow for pub and restaurant stocks like JD Wetherspoon Plc, which fell 8.8%, and Restaurant Group Plc, down 13%.
The enforced closure of non-essential retailers in areas with the highest level of restrictions weighed on Next Plc, which tumbled 5.4%, and Sports Direct owner Frasers Group Plc, down 6.3%.
Among stay-at-home winners, food delivery firms like Delivery Hero SE and Just Eat Takeaway both rose around 1%, while meal-kit maker HelloFresh SE firmed 0.4%. Work-from-home stocks TeamViewer AG and Logitech International S.A. both gained about 1%, while companies that benefit from Covid-19 testing demand also advanced, with DiaSorin SpA up 1.5%.
Elsewhere, U.K. exporters saw their declines cushioned by a weaker pound, as sterling slumped against the dollar on a double blow from the virus and lack of a Brexit trade deal as talks continue in Brussels. Weaker sterling tends to be a positive as earnings abroad are converted into pounds. Diageo declined 0.6%, while Unilever rose 0.2%.
The FTSE 100 Index was down 1.2% at 8:17 a.m. in London versus the Europe Stoxx 600’s 1.8% drop, with the pound down 1.6% against the dollar. The U.K. FTSE 250 Index slumped 2%. - Bloomberg