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The FTSE 100 climbed on Tuesday despite the U.K. remaining isolated from the rest of Europe as it battles a new strain of COVID-19.
The U.K.’s benchmark index UKX, +0.57% rose 0.6%, having slumped 1.8% on Monday after investors digested the impact of the new strain and a number of European countries banned travel to and from the country. Indexes across the continent made more substantial gains but the FTSE 100 lagged behind its peers. The more domestically-focused FTSE 250 MCX, +1.31% climbed 1.3%.
The discovery of the coronavirus variant, which Prime Minister Boris Johnson said could be 70% more transmittable, has plunged the U.K. into tighter restrictions with Christmas plans cancelled for millions of people. It has also begun to impact trade and travel as other countries close their borders to the U.K.
More than 40 countries have now banned arrivals from the U.K. as a result of the variant, which has rapidly spread across London and the south of England.
France’s border with the U.K. remained closed for freight and passenger travel on Tuesday with both sides locked in discussions over a solution. Around 1,500 lorries were stuck in Kent waiting to leave for Europe, according to a BBC report. Investors were also facing the prospect of another national lockdown in the new year as cases continued to surge.
Brief optimism over a Brexit trade deal, following reports the U.K. had made the EU an offer on fishing rights, quickly subsided as the proposal was rejected, Bloomberg reported. The British pound GBPUSD, -0.82% was 0.8% lower at $1.3358 into afternoon trading.
The U.K.’s gross domestic product (GDP) rose by a record 16% from July to September as the economic recovery from coronavirus gathered pace. However, the data was overshadowed by tougher restrictions placed on most of the country in recent weeks.
Government borrowing hit £31.6 billion last month — the highest November figure and third-highest monthly figure on record — the Office for National Statistics revealed on Tuesday, further highlighting the economic impact of the crisis.
In a reversal of Monday’s trade, British Airways owner IAG IAG, +5.80% and U.K. banks Lloyds Banking Group LLOY, +3.32% and Barclays BARC, +3.34% were the index’s biggest risers, while online grocer Ocado OCDO, -2.87% was the sharpest faller.
AstraZeneca AZN, -1.51% stock dipped 1.5% after the British drugmaker and U.S. biopharma company Amgen AMGN, -2.48% said their experimental asthma drug tezepelumab failed to meet its primary endpoint of reducing patients’ dependence on steroids, in a Phase 3 trial.
