European stock markets opened lower today as investors digested the latest coronavirus news, despite today being dubbed ‘freedom day’ in England.
Today England moved into its final stage of relaxing coronavirus restrictions, despite rising concerns from scientists surrounding the faster-spreading Delta variant.
The FTSE 100 was down 2.29% by 1pm in London. Germany’s DAX declined 2.59% while in Paris the CAC 40 was down 2.48%.
Investor confidence in the UK has fallen 5% in July, as ‘Freedom Day’ has produced fresh pandemic uncertainty.
The pound was also under pressure, falling by half a cent against the dollar to £1.372, a three-month low.
The confusion surrounding quarantine and testing rules for international travel is also leading the fresh uncertainty about the prospects for the aviation and tourism industries. With the list of countries on the green and amber lists constantly changing, the tourism industry is struggling to recover as less travelers are willing to risk losing their bookings.
Meanwhile, nightclubs can reopen for the first time since March 2020 with capacity limits lifted for all venues and events.
“Many of the stocks leading the UK stock market downwards are related to travel and leisure, suggesting that investors are extremely worried that we’ve lifted restrictions too soon and that another lockdown could be a month or two round the corner," said Russ Mould, investment director at AJ Bell.
“Covid is spreading fast again and the airlines, restaurants and leisure companies may not get the strong summer trading they’ve long hoped for. The fact Cineworld is down 8%, Carnival falling 7% and Restaurant Group 4% implies that investors think the reopening trade is now a dud."
Another growing problem is the growing number of ‘pings’ from the NHS Covid App which could cause some big staff shortages. The Confederation of British Industry warned that staff shortages due to the “pingdemic” could close supermarkets and bring car production to a halt.
Greene King said it has closed 33 pubs in the past week because of the number of staff forced to self-isolate by the NHS Covid app.