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Paring back some of its earlier losses was not enough to save the FTSE 100 from a heavy fall on Monday as global markets started the week in the cold.
The index of London’s biggest companies closed down 71.89 points, ending the day at 7198.03, a 1% fall.
It was a lift from an earlier low, which had the index down by as much as 169 points, but still a sharp drop, driven by the natural resource sector, among others.
Antofagasta and BP were some of the biggest losers. They were hit, one analyst said, by concerns that an economic slowdown could reduce demand for their products.
Mr Hewson said: “Travel and leisure initially came under pressure as the prospect of a return to normal for air travel receded further into Q1 (first quarter) of next year, with IAG and Tui continuing their trend of recent weakness.
“This started to turn around a bit in the afternoon session with the sector pulling off its lows of the day in the hope that any new lockdown could be limited in nature and, more to the point, 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.”
The better performers included Rentokil whose shares clawed back some of the losses they suffered last week after the company announced its biggest acquisition in years.
Meanwhile, Royal Mail was close to the top of the index, as investors bet that it might benefit if non-essential retail is put under pressure and people turn to online shopping.
In Europe, Paris’s Cac 40 index dropped 1.9%, while the Dax in Germany fell back 0.8%.
In New York, the S&P 500 was 1.6% in the red while the Dow Jones had fallen 1.8% as markets were closing in Europe.
On the currency markets sterling was flat against two major peers. One pound could buy 1.322 US dollars or 1.1702 euros by the end of the day.
In company news, Sir Dave Lewis the former boss of Tesco, is set to rejoin the FTSE 100 as he takes up a new role as the chair of GSK’s consumer healthcare spinoff.
He will take the reins of the board at the new unit, which will be spun off as GSK splits its business in two.
The demerger is due to happen sometime in the middle of 2022, and will create a new company worth around £45 billion, according to some estimates.
Shares in GSK dropped by 1.3% on Monday.
Shares in Rolls-Royce were also in the red, ending down 2.9%. The company announced that the Qatari sovereign wealth fund had invested £85 million into the engineering giant’s new project – building small nuclear power stations in the UK.
The Qataris will take a 10% stake in the new venture, which is backed by the UK Government and has also attracted investment from France and the US.
The biggest risers on the FTSE 100 were Rentokil, up 34.8p to 569.8p, Royal Mail, up 7.3p to 503.6p, Sage, up 9.8p to 823.2p, Tesco, up 3.2p to 287.6p, and SSE, up 13.5p to 1,622.5p.
The biggest fallers on the FTSE 100 were Antofagasta, down 76p to 1,294p, United Utilities, down 26p to 475.8p, Prudential, down 58p to 1,217p, Darktrace, down 19p to 401p, and Abrdn, down 10p to 226.6p.