The FTSE 100’s unbroken record in 2021 came to an end on Monday, as markets around the world took a breather after last week’s boom.
The index ended the day down 74.78 points, or 1.1%, at 6,798.48.
Traders went into last week with their eyes on big non-Covid news stories.
It was the first day of trading after the end of the UK’s transition period for exiting the European Union.
They were also buoyed by the run-off elections in Georgia last Tuesday, which handed control of the senate to incoming President Joe Biden’s party.
But on Monday the record Covid-19 deaths in the UK and warnings from Chancellor Rishi Sunak that the UK economy will “get worse before it gets better” caused the mood to cool.
“The threat of increased economic restrictions over the coming months has dealt a blow to market sentiment today,” said Joshua Mahony, senior market analyst at IG.
He added: “Despite an intensifying vaccination programme that has seen the UK vaccinate over 2.4 million individuals, the fear of an extended lockdown is hurting UK-focused stocks.”
Companies in the property sector were among those leading London’s top index lower, likely depressed in part by British Land, which revealed that it had collected less than half of its retail rent for the last quarter.
Fellow landlord Landsec, and housebuilders Persimmon and Berkeley were also among the losers on the day.
Landsec fell 25p to 658.1p; Persimmon dropped 63p at 2,808p and Berkeley was down 100p at 4,637p.
In Europe Frankfurt’s Dax index lost 0.8% while the Cac in Paris also fell 0.8%.
In company news, JD Sports became the FTSE 100’s brightest light, closing up 32.4p at 883.2p after upgrading its full-year profit expectations to at least £400 million, compared to the less than £300 million the market was expecting.
The co-owner of Gatwick Airport will buy private jet operator in a 4.6 billion dollar deal (£3.4 billion) after winning approval from Signature’s biggest shareholder Bill Gates.
Shares in the company rose by 29.5p, or 7.3%, to 435.5p.
British Land said that it had only collected 46% of the rents for the three months to the end of December as the lockdown and restrictions continue to see its tenants struggling to pay up.
Its shares closed down 13.1p at 452p.
Those who had taken a bet on Ladbrokes-owner Entain may have been left disappointed on Monday as its shares dropped 37p to 1,438p on the news that boss Shay Segev was stepping down after less than six months in charge.
And Royal Mail shareholders were also unimpressed with boardroom changes, as the boss of the NHS Test and Trace app, Simon Thompson, was announced as its next chief executive.
Shares closed down 6.2p at 354.1p.
The biggest risers on the FTSE 100 were JD Sports up 32.4p at 883.2p; Pershing Square up 55p at 2,735p; AstraZeneca up 85p at 7,556p; B&M up 5.2p at 549.8p and Ocado up 19p at 2,500p.
The biggest fallers were Compass down 63.5p at 1,410p; Informa down 20.8p at 545.4p; Land Securities down 25p at 658.1p; Coca-Cola HBC down 81p at 2,350p and Avast down 17.5p at 531p.