European markets slipped lower on Tuesday, as both the U.K. and Germany get ready for more severe measures to contain the spread of the coronavirus that causes COVID-19.
were up 65 points, set for a soft open after falling more than 382 points on Monday to 30,223.
U.K. Prime Minister Boris Johnson announced a third national lockdown in England on Monday evening, ordering people to stay home and closing all primary and secondary schools until at least mid-February. The presence of a new, more infectious variant of coronavirus continues to drive up infections.
Chancellor of the Exchequer Rishi Sunak announced a £4.6 billion ($6.25 billion) package of new business grants on Tuesday morning, allowing businesses in the retail, hospitality and leisure sectors to receive a one-off grant worth up to £9,000.
There will also be an additional £594 million discretionary fund to be made available to local authorities to support other businesses.
“How the [FTSE 100] index and [pound] perform throughout the rest of the day may well come down to what additional support Chancellor Rishi Sunak announces this Tuesday, ideally at least a return to the kind of aid offered during Lockdown 1.0,” said Connor Campbell, an analyst at Spreadex.
In Germany, local media report that the government will extend the national lockdown by three weeks, to the end of January. The country’s second strict lockdown has been in place since Dec. 16, and it began rolling out the first COVID-19 vaccinations on Dec. 27 along with the rest of the 27-member European Union.
“Following a strong start to the new year for markets, pandemic woes dampened the mood overnight,” said Milan Cutkovic, an analyst at Axi. “Investors will have to accept that Europe could find itself in lockdown until spring — with perhaps some temporary easing of restrictions in-between.”
The European oil supermajors led the list of the market’s winners on Tuesday, with shares in Royal Dutch Shell
rising near 3%, with BP
stock close behind at 2.5% higher. Eni
rose around 1.5% as Total
was close to 1% higher.
British retailer Next
led the FTSE 100’s rise into the green, up close to 9%, as the first nonfood retailer to report on Christmas trading said that sales in the nine weeks to Boxing Day (Dec. 26) were far better than expected. The company also said that it expects profits to recover to near pre-pandemic levels in the next financial year.
Shares in German chip maker Dialog Semiconductor
were trading more than 3.5% higher, following positive guidance on fourth-quarter revenues due to increased demand for 5G devices.