Source: Sharecast
The FTSE 100 ended the session down 0.99% at 7,198.03, and the FTSE 250 was 1.01% weaker at 22,549.88.
Sterling was also in negative territory, last falling 0.26% against the dollar to trade at $1.3210, and sliding 0.68% on the euro to change hands at €1.17.
“European markets have started the week sliding sharply lower as rising concerns over the spread of Omicron, and how governments react to it has prompted widespread weakness across the board, and not much in the way of Christmas spirit, which seems to be in very short supply,” said CMC Markets chief market analyst Michael Hewson.
“Today’s declines have probably been exacerbated by low liquidity levels and the fact that most market participants are pretty much done for the year.
“Travel and leisure initially came under pressure as the prospect of a return to normal for air travel receded further into the first quarter of next year, with IAG and TUI continuing their trend of recent weakness.”
Hewson noted that it started to turn around somewhat during afternoon trading, with the sector pulling off its lows of the day in the hope that any new lockdown could be limited in nature, and short-lived.
“There is also the small matter that they’ve already been beaten up so much these past few days, that they are back at their lowest levels this year, or close to peak pessimism.
“This appears to be prompting some cautious buying, with most of the sector off their lows of the day.”
British ministers were earlier summoned to an emergency meeting of the Cabinet as the government responded to a rising number of Omicron Covid variant cases.
The meeting began at 1400 GMT, where chief medical adviser Chris Whitty and chief scientific adviser Sir Patrick Vallance were set to update ministers on the Covid situation.
Johnson was under pressure from members of his own party not to introduce new restrictions, and was struggling to maintain control after a series of photos and allegations emerged claiming he and his staff held parties in breach of lockdown rules at the time.
However, the Scientific Advisory Group for Emergencies (SAGE) has called for new measures before the new year to ease pressure on the National Health Service.
The Cabinet meeting was also called as hospitality industry leaders called on Finance Minister Rishi Sunak to commit to a package of support for businesses or risk the permanent closure of 10,000 pubs and restaurants.
They were responding to a collapse in bookings as traditional Christmas work parties have been cancelled.
Indeed, concerns over the Omicron variant of Covid-19 saw shoppers increasingly abandoning retail destinations towards the end of last week, with retail analysis showing a sharp drop in footfall in large city centres over the weekend.
Retail data outfit Springboard said that overall, footfall across UK retail destinations rose 5.5% last week from the week before, but that over the weekend it declined by 8.5% in central London and by 6.4% in cities outside of the capital.
That meant that in high streets across the UK, footfall declined 2.6% over the final pre-Christmas weekend.
“Despite the introduction of Plan B guidance to work from home and the significant rise in Covid infections, footfall rose last week across UK retail destinations,” said Springboard insights director Diane Wehrle.
“However, the growing nervousness of consumers meant that increases dwindled with each day that passed, and by Friday the uplift in footfall was around just a quarter of that on Wednesday.
“This provided a forewarning for subdued performance of bricks and mortar stores and destinations over the weekend which, whilst regarded as the peak shopping weekend of the year, is exactly what occurred.”
Elsewhere, a fresh industry survey showed UK manufacturing activity remaining strong but stock adequacy hitting another record low.
The Confederation of British Industry’s total orders balance nudged down to +24 from a survey record high of +26 in November, but was ahead of expectations for a reading of +20.
At the same time, the gauge for stock adequacy of finished goods worsened to its weakest on record for a second month in a row, to -24% in December from -16% the month before.
Respondents also said they expected price pressures to remain acute in the next three months.
“UK manufacturing demand remains strong, and output accelerated to meet this demand in December,” said CBI deputy chief economist Anna Leach.
“However, behind the scenes, firms are battling pressures on a number of fronts.
“Stock adequacy of finished goods worsened to an all-time low for the second month in a row, and continued expectations for sharp price growth are a further challenge for the sector.”
In equity markets, travel and leisure shares were under pressure amid the mounting pressure of the Omicron variant, with BA and Iberia parent IAG descending 0.83%, travel caterer Compass Group off 1.8%, InterContinental Hotels losing 0.83%, and low-cost carrier easyJet flying 0.39% lower.
Upper Crust owner SSP slipped 0.81%, station and airport concessionaire WH Smith lost 3.89%, and package holiday outfit TUI was down 0.6%.
Premier Inn owner Whitbread and low-cost airline Wizz Air reversed earlier losses to respectively close up 0.65% and 0.4%, however.
Cineworld Group tumbled 7.1% on reports that short sellers had lined up more bets against the heavily-indebted cinema chain, amid concern at the huge damages it was ordered to pay to Canadian rival Cineplex.
Around 16% of Cineworld shares were on loan to short sellers, according to IHS Markit.
Traders had continued to place bets against the company even after its shares plunged 39% last week, following a Canadian court order for Cineworld to pay £722m in damages to Cineplex for aborting a takeover last year.
Events business Informa slid 5.3% by the end of trading, no doubt amid concerns about the impact of further restrictions.
Rolls-Royce lost 3.34% after it said Qatar had agreed to invest £85m in its nuclear reactor business in return for a 10% stake.
The investment was being made by the emirate’s sovereign wealth fund, the Qatar Investment Authority (QIA).
On the upside, pizza chain master franchisee Domino’s Pizza Group rose 1.3%, likely on expectations its delivery offer would get a boost from any further restrictions over the Christmas period.
Royal Mail was ahead 1.47%, with Russ Mould, investment director at AJ Bell, noting that it would "no doubt benefit as consumers rush to place last-minute online orders for Christmas presents, avoiding the high street for fear of getting Covid".
Software firm Sage advanced 1.2% after it agreed to acquire Brightpearl, a cloud native multichannel retail management system for retailers and wholesalers, for £225m.
Sage already held a 17% stake in the business.
Carnival was ahead 1.96% after the cruise giant said the impact from new coronavirus variants could be short-lived based on demand for cruises late next year and 2023, and despite the Omicron surge hitting near-term bookings.
The company forecast a net loss for the first half of 2022 before turning profitable in the second half.
Cash from operations turned positive in the month of November, Carnival’s chief executive Arnold Donald said, adding the cruise operator expected positive cash flow beginning in the second quarter of 2022.
Market Movers
FTSE 100 (UKX) 7,198.03 -0.99%
FTSE 250 (MCX) 22,549.88 -1.01%
techMARK (TASX) 4,428.56 -0.82%
FTSE 100 - Risers
Rentokil Initial (RTO) 569.80p 6.50%
Dechra Pharmaceuticals (DPH) 5,090.00p 1.70%
Royal Mail (RMG) 503.60p 1.47%
Sage Group (SGE) 823.20p 1.20%
Tesco (TSCO) 287.60p 1.13%
SSE (SSE) 1,617.50p 0.84%
Croda International (CRDA) 10,005.00p 0.79%
Spirax-Sarco Engineering (SPX) 15,485.00p 0.68%
Whitbread (WTB) 2,790.00p 0.65%
Sainsbury (J) (SBRY) 272.70p 0.55%
FTSE 100 - Fallers
Antofagasta (ANTO) 1,297.50p -5.51%
Informa (INF) 475.80p -5.30%
Prudential (PRU) 1,218.50p -4.55%
Abrdn (ABDN) 226.60p -4.35%
Smith (DS) (SMDS) 372.20p -3.53%
M&G (MNG) 187.50p -3.40%
Rolls-Royce Holdings (RR.) 110.48p -3.34%
Fresnillo (FRES) 885.60p -3.19%
BP (BP.) 323.30p -3.13%
Mondi (MNDI) 1,760.00p -3.11%
FTSE 250 - Risers
Oxford Biomedica (OXB) 1,124.00p 5.24%
Moneysupermarket.com Group (MONY) 212.80p 4.31%
Watches of Switzerland Group (WOSG) 1,368.00p 2.99%
BH Macro Ltd. GBP Shares (BHMG) 3,860.00p 2.66%
Indivior (INDV) 257.60p 2.30%
PureTech Health (PRTC) 293.00p 2.09%
Premier Foods (PFD) 108.20p 2.06%
Carnival (CCL) 1,270.20p 1.96%
Auction Technology Group (ATG) 1,406.00p 1.88%
Future (FUTR) 3,546.00p 1.37%
FTSE 250 - Fallers
Cineworld Group (CINE) 31.29p -7.10%
Trustpilot Group (TRST) 294.60p -6.83%
Network International Holdings (NETW) 266.30p -4.89%
Bytes Technology Group (BYIT) 540.00p -4.87%
Darktrace (DARK) 400.60p -4.62%
Hochschild Mining (HOC) 132.10p -4.55%
National Express Group (NEX) 238.00p -4.49%
TBC Bank Group (TBCG) 1,536.00p -4.48%
Petropavlovsk (POG) 20.44p -4.31%
NCC Group (NCC) 230.00p -4.17%