European shares tumble on tighter Covid-19 curbs in UK, Brexit uncertainty

European shares slumped on Monday as the rapid spread of a new strain of the coronavirus led to a more stringent lockdown in England and a travel ban from many countries, while a Brexit trade deal still hung in the balance.

After ending last week higher, the pan-European STOXX 600 index slid 2.3% after UK imposed an effective lockdown and reversed plans to ease curbs over Christmas as it dealt with a new coronavirus strain up to 70% more transmissible than the original.

Canada as well as European neighbours, including Germany, Italy and the Netherlands, ordered a suspension of flights from Britain, while France’s ban also included freight carriers, whether by road, air, sea or rail.

Worries about the fresh hit to an economic recovery saw London’s FTSE drop 2.1% even as the pound sank. Germany’s DAX was down 2.3%

Travel and leisure stocks shed 5.5% and were on course for their worst day in three months, while oil majors led losses in Europe as new restriction spurred worries about a hit to demand and weighed on crude prices.