The London markets and sterling stumbled on the back of a slew of poor economic data and caution over the potential for harsher travel restrictions across Europe.
January’s early PMI (purchasing manager’s index) figures came in significantly below economist expectations after the latest lockdown hammered private sector activity.
Meanwhile, new figures from the Office for National Statistics (ONS) showed that retail sales in 2020 fell at the fastest rate in 23 years, while government borrowing rose to £34.1 billion last month.
The FTSE 100 closed 20.35 points, or 0.3% lower, at 6,695.07 at the close of play on Friday.
“It is a broad-based sell off, as fears that England’s lockdown might last until summer has impacted most sectors,” said David Madden, market analyst at CMC Markets UK.
“There are concerns the EU might shut internal borders and there has been chatter the bloc might ban travellers from the UK.
“Even though none of these measures have been confirmed, the very mention of them has soured sentiment in equities.”
Elsewhere in Europe, sentiment was also weighed down by PMI data showing regional declines, with the French CAC particularly impacted by a worse-than-expected performance for its services sector.
The German Dax was 0.36% lower and the French Cac moved 0.56% lower.
Across the Atlantic, markets cooled as the S&P and Nasdaq recoiled from Thursday’s record highs are traders were content to trim their exposure to stocks following the latest bullish run.
Sterling was particularly weak in the face of the UK’s poor day for economic data, with the below par set of PMI figures sparking a sell off on Friday morning.
The pound decreased by 0.38% versus the US dollar to 1.368 and was down 0.47% against the euro at 1.123.
In company news, Cineworld saw shares slip again after the latest James Bond film No Time To Die had its release date pushed back for a third time.
It came after traders were also cautious in the face of reports its board will face a shareholder revolt over a scheme which could allocate its bosses up to £208 million in pay awards despite thousands of its staff remaining on furlough.
Shares were 3.28p lower at 66.1p at the close of play.
The Works saw shares move higher despite the discount books and stationery retailer expressing concerns it could breach banking covenants due to the impact of the pandemic.
It closed 2p higher at 35.5p after it said online sales for the past 11 weeks are up 70% on the same period last year.
Kainos Group saw shares rise 186p to 1,322p after the IT consulting firm said it anticipates results for its current financial year will be ahead of current market expectations.
The price of oil dipped on the back of report that China is edging towards even more localised pandemic restrictions, which could impact oil demand.
The price of Brent crude oil decreased by 0.73% to 55.52 dollars per barrel.
The biggest risers on the FTSE 100 were RELX, up 50p at 1,869.5p, SSE, up 38.5p at 1,547p, Ashtead, up 72p at 3,832p, and Just Eat Takeaway, up 150p at 8,550p.
The biggest fallers on the FTSE 100 were IAG, down 5.35p at 151.6p, Next, down 244p at 7,914p, Melrose Industries, down 5.1p at 175.45p, and ABF, down 65p at 2,254p.