FTSE 100 in £44bn tumble, Dow’s worst day since October, as Covid fears hit markets – as it happened

Graeme Wearden

from on 2021-07-19 21:07 (#5MBHT)

Rolling coverage of the latest economic and financial news, as global selloff wipes 44bn off London's blue-chip index

10.07pm BST

That's all for today. A quick recap of the key points.

Global markets have suffered heavy losses on fears that a resurgence of Covid-19 cases will undermine the economic recovery.

9.51pm BST

Today's stock market tumble in London (and beyond...) is a reminder that escaping from the unfree, restricted economy created by the pandemic is likely to be a messy affair, my colleague Nils Pratley writes:

First, nobody can be 100% confident that the lifting of most coronavirus restrictions really will be irreversible". If cases could climb to 100,000 a day, as health secretary Sajid Javid has warned, it would be silly to take any political promise as solid.

Second, the pingdemic" problem is real and is being felt by businesses as far apart as pubs and car factories; exception from self-isolation rules, as outlined by the prime minister on Monday, won't help all.

9.31pm BST

The Dow Jones industrial Average has posted its worst day in nearly nine months,

Today's 2.1% slide is the Dow's biggest one-day drop since October 2020, as investors fear that rising Covid-19 infections will shunt the economic recovery off course.

Much of it is related to the Delta (variant)," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. There's some concern too that maybe the economy is not going to open up as quickly as everyone thinks, and the big boom that everyone's expecting is going to be more of a pop than a boom."

We're woefully off of breakneck economic growth, and judging by the activity we're seeing we're overestimating a lot of the economic reports," Nolte added.

Dow drops 700 points for its worst drop since October as investors fear a Covid resurgence. https://t.co/WEHK1NWEYr pic.twitter.com/DzUtIgGLdD

Worst day since October for the Dow, but some nice dip-buying into the close pic.twitter.com/wj2H3gCOP9

9.20pm BST

US energy stocks had a particularly grim day, down 3.6%.

And no wonder -- oil has now slumped by around 7% today, a massive slide. US crude is trading at $66.34 per barrel, down $5.5 per barrel, at its lowest since the start of June.

9.15pm BST

Ding ding. The NYSE closing bell has rung, with US stocks sharply lower as worries over the pandemic, global growth, and US-China relations all hit the market.

The S&P 500 index, which covers a broad swathe of US stocks, has tumbled by over 68 points, or 1.6%, to 4,258 points -- its biggest one-day fall in over two months (since May 12th).

S&P 500 declined 1.6% on Monday amid fears the delta coronavirus variant may stall the economic recovery https://t.co/11xhkdpUbW pic.twitter.com/Gvk1wCGJSZ

Worst day for the S&P 500 since May 12.

8.59pm BST

Wall Street investors have also been digesting the news that US authorities have risen the risk of traveling to the UK to its highest level, very high", and warned Americans not to travel there due to the pervasiveness of Delta.

The U.S. State Department and the U.S. Centers for Disease Control and Prevention (CDC) both issued their highest warnings against travel to the United Kingdom because of a rising number of COVID-19 cases in the country (on the day England eased its Covid-19 restrictions....).

8.55pm BST

Dow off 700-plus almost at the close. pic.twitter.com/JmOKtF7Zhk

8.20pm BST

And here's Bloomberg's take:

Stocks slumped around the world as investors rushed into haven assets after the delta coronavirus variant cast a pall over the economic recovery, while tension between the U.S. and China escalated.

In a reversal of the reopening trade that has powered this year's equity rally, cyclical companies bore the brunt of Monday's rout. Commodity, financial and industrial shares led losses in the S&P 500, which fell the most since May. Airlines and cruise operators tumbled amid concern over further travel restrictions. After recently plunging to pre-pandemic levels, the Cboe Volatility Index, or VIX, soared. European stocks had their biggest drop of 2021, following a selloff in Asia.

7.50pm BST

Here's our news story on today's market drama:

6.04pm BST

Stocks are being hammered harder on Wall Street too, where pandemic fears are also rife.

The Dow Jones industrial average is now down 880 points, or 2.5%, at 33,807 points - extending its earlier losses. Energy stock, financials and industrials are all being hit by growth worries.

U.S. stocks fell aggressively Monday on concern a rebound in Covid cases would slow global economic growth. The selling picked up though early afternoon and the Dow Jones Industrial average was headed for its biggest drop of the year.

The Dow dropped 920 points, or 2.7%, exceeding a 2% decline in late January. The S&P 500 fell 2.1% with energy and industrial sectors as the worst performers. The tech-dominated Nasdaq Composite lost 1.5%. The small-cap Russell 2000 briefly dropped into correction territory, falling 10.7% from its 52-week high on March 15.

Sell-off intensifies as the Dow tumbles more than 900 points amid pandemic fears. https://t.co/WEHK1NWEYr pic.twitter.com/Gw6LGbvqgY

The market sell-off intensifies as the Dow tumbles more than 900 points amid pandemic fears. https://t.co/9C8quiJZ3o pic.twitter.com/x5Q6SGiFKj

5.56pm BST

Here's Danni Hewson, AJ Bell financial analyst, on today's market rout:

All last week investors flipped and flopped their way through the maze of contradictory data and declarations but whatever the narrative case numbers don't lie, and the numbers aren't good.

The FTSE 100 has plummeted way below that psychological 7,000 figure with very few of its components managing to stay out of the red zone today.

Concerns about how robust recovery really is has sent the oil price under $70 a barrel and in marked contrast to the $100 that was being discussed as a real possibility for this summer. The OPEC+ spat resolution will have played a part but Delta is destructive and US markets aren't immune either.

Investors appear to be flocking to the safe haven of government bonds with yields plummeting to levels last seen back in February and Wall Street has followed the trajectory of European markets.

5.50pm BST

The pound is still having a rough day against the US dollar.

Sterling is currently down a cent today at to $1.3673, a three-month low - having briefly hit its lowest since February.

Neil Jones, head of FX sales at Mizuho, said that the losses in the pound were caused by investors liquidating their long positions.

The pound was one of the real darlings of the foreign exchange market for a number of months now," he said, citing Britain's speedy vaccine rollout as a driver of gains earlier in the year.

5.38pm BST

European stock markets also suffered sharp losses, as anxiety over the Delta variant gripped investors.

The pan-European Stoxx 600 tumbled by 2.3% to its lowest close in two months, with Germany's DAX and France's CAC both down over 2.5%.

Today was supposed to be a landmark day where the UK economy finally shook off the handbrake of Covid-19 restrictions. Instead of a story of vaccine success it has turned out to be, not only a political shambles, but a big market sell-off over concern about the effect rising hospitalisations, along with big increases in the numbers of people self-isolating will have on the recovery story.

Over the weekend the UK government did its best impression of shooting itself in the foot over its isolation policies, while Delta variant cases have been rising sharply, sparking concern that hospitalisations could rise to a level that might overwhelm the NHS.

The main concern appears to be that rising infection rates, along with an increase in self-isolation levels, as a result of being pinged by NHS Track and Trace, could stymie the recovery that has been in place since March.

A lot of hospitality venues are already having to close due to a shortage of staff who are isolating as a consequence of being pinged by the app.

5.20pm BST

Today's selloff has wiped around 44bn off the value of the FTSE 100 index today, as investors ditched shares on fears over the Covid-19 pandemic.

Another 9.6bn was knocked off the value of the smaller FTSE 250 index, as Freedom Day proved to be a painful one for investors.

5.01pm BST

The smaller FTSE 250 index, which contains medium-sized firms, also tumbled today.

It shed 526 points to finish at 21,940 points (also down 2.34%).

Freedom day' flop for FTSE 100 as U.K. stocks retreat https://t.co/lYqpPiOBVk

4.54pm BST

Britain's blue-chip FTSE 100 index has posted its biggest one-day fall in two months, as fears over the Covid-19 pandemic hit markets.

The FTSE 100 has marked so-called Freedom Day' by tumbling by nearly 164 points, or 2.34%, to finish at 6844.4 points.

Far from giving investors a jolt of confidence, Freedom Day has seen it evaporate, as sharply rising infection rates disrupt businesses across the UK. From retail to manufacturing and hospitality, the warnings are coming thick and fast that mandatory isolation is leading to reduced business operating hours, a drag on sales and a reduction of output. Amidst concerns that soaring infection rates could derail the recovery are worries about inflation heating up, and the knock on effect of rising interest rates combined with the roll back of mass bond buying programmes.

This is what the #market makes of #FreedomDay. So inevitable (sold out of many stocks a month ago expecting it sooner tbh).#ftse100 #markets pic.twitter.com/i4Z3tiYlVu

The confusion surrounding quarantine and testing rules for international travel is also leading to fresh jitters about recovery for the aviation and tourism industries.

Optimism which had been on the horizon just a few weeks ago has again been obscured by dark clouds, especially with the snap decision to enforce a 10 day quarantine for arrivals from France. With the rules for teenagers also unclear, many families, once hopeful for a holiday, are now putting away their suitcases, settling for a summer of staycations and day trips.

With some scientists warning that infections could reach 200,000 a day by September, there is now a feeling that the UK could be staring at a fresh Autumn lockdown.

Primark has only just bounced back from the Covid shock and fresh closures would seriously derail its recovery.''

4.24pm BST

The pound has now fallen to its lowest level in over a month against the euro.

It's dropped by 0.5%, or two-thirds of a eurocent, to 1.1595, as sterling continues to weaken.

Monday is Freedom Day" in the UK, when the reopening will occur in all its glory! No more social distancing and no more masks. All nightclubs and businesses that have been closed will reopen. The unlocking had been pushed back a month to allow most of the country to receive vaccinations. However, scientists are weary of the reopening as the UK reported 51,870 new coronavirus cases, the biggest one day increase since January.

Economists are weary of not reopening as it will cause more financial burden. The world will be watching closely to see if there is a significant number of new cases after Monday. The variant is rampant in other parts of the world as well. On Friday, the Netherlands has its biggest one day increase since December. Russia reported 799 new deaths, the most on record. Australia, which was hailed for controlling the original coronavirus now has areas on lockdown, such as Sydney and Victoria. All eyes will be on the UK over the next month!

3.56pm BST

Investors are continuing to pile into the safety of US government bonds, driving the yield on benchmark US Treasuries down below 1.2% for the first time since February.

That indicates they are more worried about a global slowdown, as the Delta variant of Covid-19 spreads.

US Treasury 10 yr yields also at lowest since Feb as concerns about virus spread disrupting growth overtake inflation fears

Wow! US 10-year Treasury #Yield down to 1.21%. It seems the growth scare is getting real. pic.twitter.com/4BS8aCXdZA

With GDP growth peaking, Covid on the rise, and the Federal Reserve looking to reverse some of its massive #stimulus, uncertainties about future growth are increasing. US Treasury #yields, often seen as a safe haven and an indicator of economic activity, reflect this.

3.43pm BST

Crude oil has plunged by over 5%, extending its earlier losses.

This has pulled Brent crude down to $69.59 per barrel, the lowest since early June.

Crude oil has unsurprisingly sold off on the back of the weekend news from the OPEC+ group.

Although their new agreement means short-term uncertainty has been lifted, the fact that baseline production levels were raised means more oil supply will be coming back than expected, and at a time when rising Delta variant of covid is raising question markets about the sustainability of demand.

The delta variant is hammering markets today. S&P 500 down 2%, US 10 year yields drop more than 10bps and Brent crude falls 5.7% to less than $70 a barrel. Ouch pic.twitter.com/JkEQCbFj8d

3.38pm BST

Hospitality firms such as pubs and restaurants were already struggling to find enough staff before they were hit by pingdemic" absences caused by employees being told to isolate by NHS test and trace, according to official figures.

Revenues were still below 70% pre-pandemic levels at the end of May, according to data from the Office for National Statistics released on Monday, with pubs and nightclubs faring even worse.

We've released new analysis into the effect of #COVID19 on the UK hospitality industry.

Consumer spending in pubs and restaurants was still 36% below its pre-pandemic level at the end of June, according to new @RevolutApp data https://t.co/jxTZNzlHQc pic.twitter.com/EkhUJ8WNJg

Confidence among licensed restaurants and pubs that they could survive the next 3 months fell between early April and early June

from 18% to 15% for restaurants
from 20% to 14% for pubs and bars

https://t.co/72cVOy4NHZ pic.twitter.com/0ZhPHw4Eq1

Expenditure by food and drink businesses in May remains at only 51% of its February 2020 level, according to @Vocalink data, being published by us for the first time today https://t.co/S82IlOESCf pic.twitter.com/JudVYlavIX

Commenting on our new data on #COVID19's impact on UK hospitality, including after the re-opening of indoor dining, our Senior Economist Hugh Stickland said: (1/2) pic.twitter.com/db0I66xM30

Hugh Stickland continued: (2/2) pic.twitter.com/cdSOY1aWGz

3.17pm BST

Back in London, the selloff is worsening too.

The FTSE 100 index is now down 190 points, or 2.7%, at 6,817 points, the lowest since early April.

3.15pm BST

Risk appetite has vanished today, says Edward Moya of OANDA, as fears over the pandemic erupt again.

Risk aversion is firmly in place as the Delta Covid variant spread is triggering a flight to safety as global economic concerns intensify. Global investors are growing anxious and selling stocks, commodities, and even cryptocurrencies to buy US Treasuries.

With coronavirus surging across both advanced and developing nations, the bond market is delivering a one-way trade, lower global bond yields. Equities were ripe for a pullback given Wall Street was in agreement that this is as good as it gets' for peak earnings, economic growth, monetary stimulus, and shortly fiscal support. It is hard to hold risky assets over the short-term now that we have past peak everything.

The laundry list of issues between the world's two largest economies continues to grow and likely suggests we won't see calm waters anytime soon. US-China tensions saw telecom and cybersecurity issues jumped ahead of both trade tariffs and living up to the phase-one trade deal. Human rights issues, China's tech crackdown, and handling of Hong Kong are also contributing to US-China tensions.

Panic selling of risky assets could happen if a back-and-forth of harsh tones becomes a recurring theme between the US and China.

3.06pm BST

A wave of selling is sending stocks lower in New York.

The Dow is now down over 2% at 33,965 points, a drop of 722 points in the first half hour of trading.

The Dow drops more than 650 points on fears of a Covid rebound. https://t.co/fnMczMsUDF pic.twitter.com/bX5Zqy2wWJ

Panic-like selling emerges early Monday as Dow skids 2% lower, eyes sharpest selloff in 2 months https://t.co/eywm3YajDZ

3.01pm BST

US airline shares are sharply lower, with American Airlines and United Airlines both down around 6.7%.

2.56pm BST

Aerospace manufacturer Boeing are leading the fallers on the Dow Jones industrial average, down 4.9%, on fears that rising Covid-19 cases will hit demand for planes.

Financial stocks are also being hit by growth worries, with Goldman Sachs off 3.8% and American Express down 3.6%, as are chemicals firm Dow Inc (-3.6%) and manufacturing group Honeywell (-2.9%).

2.39pm BST

The global selloff that began in Asia-Pacific markets and rippled through London and other European markets has now reached New York.

Wall Street has opened in the red, as worries about global growth and a resurgence of Covid-19 cases pull US indices away from their recent record highs.

Dow drops 500 points on fears of a Covid rebound, airlines are among the biggest losers https://t.co/qZ8NfnzEx6

1.50pm BST

It's difficult to have a conversation with anyone in the U.K. without a debate as to whether the U.K. is correct to lift all legal covid restrictions today with cases surging through the population, says Jim Reid of Deutsche Bank:

He told clients that the world will watch the UK's move with great interest:

Those for suggest that with all the vulnerable groups fully vaccinated and every adult having been offered at least one jab then we have to start learning to live with the virus and the summer is the best place to start. To delay would only postpone cases and risks the peak occurring in winter when the health service is usually more stretched. Mental health considerations also come into the equation as does the still relatively low death rate.

Those against will suggest that fully reopening now after the recent surge in cases could soon lead to high hospitalisations and genuinely risk pressurising the health service. They would also argue that new variants could emerge with such a wide prevalence of cases and could also create huge numbers of long covid cases and more deaths than should occur.

The pound is coming under pressure, heading for lows not seen since April, despite the arrival of the so-called Freedom Day' which marks the ending of almost all COVID-related restrictions.

Investors are showing nervousness at a time when the country is averaging close to 50,000 new cases a day, fearing that the relaxation of all rules now may eventually lead to negative social and economic outcomes.

It is worrying Sajid Javid, the nominated Adult in the Room overseeing Boris' cabinet while providing much needed common sense, has apparently come down with Covid - despite being double vaxxed.

On one hand there is the reflation trade, expectations of a gold-plated earning season, and the apparent resolution of OPEC disagreements to stabilise oil prices is stock positive.

On the other, data watching analysts are saying the economic recovery has already stalled, the likelihood is for lower-for-longer rates, thus bonds have rallied.

1.41pm BST

Tin hats on....

The morning sell-off in stock futures is accelerating with Dow futures now down 500 points https://t.co/cOY6YAyKn4

1.34pm BST

The pound has now dropped back to $1.37 against the US dollar for the first time since mid-April, down two-thirds of a cent today.

Jeremy Thomson-Cook, chief economist at international business payments firm Equals Money, says concerns over the loosening of restrictions in England as Covid-10 numbers rise are hitting the pound.

Given the increase recently in cases we're probably about a week from finding out how hospitals are coping, but we do know that some hospital trusts are already having to cancel operations to battle Covid.

12.51pm BST

Nervous investors are piling into the safety of US government bonds, as they worry that the global economic recovery will be hurt by the rise in Covid-19 cases.

This is driving up the price of US Treasuries, sending yields (or interest rates) sliding:

*U.S. 30-YEAR YIELD FALLS TO 1.841%, LOWEST SINCE FEBRUARY 1 - BBG

BREAKING:

*U.S. 10-YEAR TREASURY YIELD EXTEND FALLS, DOWN 7 BPS TO 1.23% pic.twitter.com/Icl8s1xe9H

U.S. stock index futures fell aggressively on Monday on concern a rebound in Covid-19 cases would slow global economic growth. The selling in futures increased as the morning progressed with Dow Jones Industrial average futures now down about 450 points.

Stocks that would most directly benefit from a continuing swift reopening of the economy led the losses in premarket trading with shares of Royal Caribbean and United Airlines falling more than 4%. The 10-year Treasury yield fell to a new 5-month low of 1.23%, amid concerns about a possible slowing in the economy.

Treasury yields start the week lower, 10-year Treasury around 1.27% https://t.co/FXP9q1MCqv

12.46pm BST

Wall Street is also on track to open lower, with the S&P 500 index down over 1% in pre-market.

Marketwatch says:

Pressure on global equity markets Monday was attributed largely to the continued rise in the number of COVID-19 cases world-wide.

Markets seem to be grappling with the fear that the virus isn't going away despite widespread vaccinations in the major economies," said Marios Hadjikyriacos, senior investment analyst at XM, in a note.

Dow futures drop over 300 points as spread of delta variant continues https://t.co/kt8euaFmCa

12.44pm BST

Other major European markets have also fallen further, with Germany's DAX and France's CACboth falling around 2.2% today.

12.42pm BST

After a painful morning for traders, London's blue-chip stock index is sinking to a new two-month low.

The FTSE 100 is currently down 160 points or 2.3% at 6848 points, its lowest since 13th May.

Many of the stocks leading the UK stock market downwards are related to travel and leisure, suggesting that investors are extremely worried that we've lifted restrictions too soon and that another lockdown could be a month or two round the corner.

Covid is spreading fast again and the airlines, restaurants and leisure companies may not get the strong summer trading they've long hoped for.

Lots of people have been vaccinated and assumed they had become invincible. Reality is now striking as many of these individuals get a wake-up call by catching Covid or being pinged and told to isolate.

Pictures from UK airports would suggest some increase in flying but certainly nowhere near the levels one might have expected a few months ago. Then, everyone was talking about their big plans to celebrate once Freedom Day came around, and now it's proved to be a damp squib.

12.03pm BST

Sir Martin Sorrell's advertising and marketing company, S4 Capital, has reported booming business amid what it described as a post-pandemic rebound" in the global economy, as it prepares for expansion.

S4 said like-for-like gross profits and revenues were both at levels beyond expectations", in a statement to the stock market on Monday.

activity has continued at unprecedented levels in May and June, driven both by the post-pandemic rebound in global GDP and the acceleration in digital marketing transformation".

11.32am BST

Months of frenzied buyer activity" have driven the average asking price for a home in Britain to a new high, according to property website Rightmove this morning.

The property portal said it expected figures from HMRC due later this week to show that June was the busiest month on record for sales, with buyers rushing to complete before stamp duty rules change in parts of the United Kingdom.

11.22am BST

Bank of England policymaker Jonathan Haskel has warned it would be risky to rein in the Bank's stimulus package soon.

For the foreseeable future, in my view, tight policy isn't the right policy.

The immense support for the economy over the pandemic looks like it might have averted deep scarring. The anticipation of an improved future might well feed into demand today and so add to inflationary pressure. But much of inflation will be high temporarily due to the low base from which prices are rising. In addition the economy is fully not recovered yet and faces two headwinds over the coming months: the highly transmissible Delta variant and a tightening of the fiscal stance.

Against this backdrop, risk-management considerations lean against a pre-emptive tightening of monetary policy until we can be more sure the economy is recovering in a manner consistent with the sustained achievement of the inflation target. For now, tight policy is not the right policy.

Jonathan Haskel discusses the way in which the Bank of England measures the long-term economic damage that shocks like Covid can cause.

Read the speech here:https://t.co/88snGKCN5f

10.41am BST

Shares in Ocado have hit their lowest level in over a year, after a fire at a fulfilment centre in south-east London on Friday.

Ocado are down 3.3% this morning at 17.45, their weakest since early May 2020, as the disruption forces the company to cancel orders.

Ocado has cancelled thousands of orders after a fire at a fulfilment centre in south-east London on Friday.

The online grocer said the blaze started when three of the robots that help pick its groceries collided at the Erith site.

We're really sorry. Due to a major incident at our Erith warehouse some of our orders have been cancelled. Please be patient with us while we manage this. If this impacts your order, we will be in touch. Thank you.

Hi there, Due to a Major incident at our Erith CFC we have temporarily blocked orders from being placed, please be patient with us during this time. - Alannah

Hi there, We're really sorry for the trouble caused, Please could you DM us your full name, email address and postcode, confirming that you're the account holder? and a member of the team can look into this right away. - Alannah

10.25am BST

Some encouraging economic data: the eurozone's building sector returned to growth in May.

Construction output rose 0.9% month-on-month across the euro area, after a drop in April.

Euro area #construction +0.9% in May over April 2021, +13.6% over May 2020 https://t.co/AyomgvnPAB pic.twitter.com/JzcZk89Yla

10.07am BST

The selloff is gathering pace in London.

After two hour's jittery trading, the FTSE is down 130 points or almost 1.9% at 6877 points - still a two-month low.

Investors have moved risk averse for the moment, as a number of persistent concerns weigh on sentiment.

In the US for example, the stubborn presence of the Delta variant has led to some switching from growth stocks, such as big tech into defensives, such as healthcare and utilities, as various levels of lockdown continue in many parts of Asia, threatening to defer the global economic recovery.

The likes of the oil and mining sectors are under pressure within the premier index on fears of slowing growth. At the same time, stocks caught in the reopening trade such as the travel sector continue to be volatile even after the easing of some international restrictions, as time begins to run down on a potential 2021 return to widespread tourism.

9.57am BST

Takeover news: The British video games developer Sumo Group has been snapped up by China's Tencent in a 919m deal.

9.46am BST

Oil has hit its lowest level in a month, after the Opec group and its allies reached an agreement to boost output.

The deal means oil production will continue to rise over the next few months, with output at the end of 2021 roughly two million barrels per day higher than today.

Brent crude fall 2% at $72.10 per barrel and WTI crude drop 2% to trade at $70.35 per barrel.#OOTT pic.twitter.com/7DpqmkezJk

9.27am BST

Copper, a handy gauge of the economic outlook, has dropped this morning as surging Covid-19 cases threaten the economic recovery.

Three-month copper on the London Metal Exchange (LME) fell 0.6% to $9,367 a tonne by 0719 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange ended 0.7% down at 68,740 yuan ($10,610.02) a tonne.

Those who would seek to push metals higher stood aside today as Asian equities are all down," Malcolm Freeman, a director at UK brokerage Kingdom Futures, said in a note.

9.10am BST

Travel and leisure stocks are being hit by England's unexpected decision to make double-vaccinated travellers returning from France continue to quarantine.

The news, which emerged on Friday night, will disrupt the travel plans of thousands of British holidaymakers.

We cannot afford to continue with this on-again, off-again approach to international travel, which is leaving consumer confidence in tatters, pushing businesses to the brink and will lead to further job losses."

8.51am BST

European stock markets are also in retreat this morning, matching the losses in London.

Germany's DAX is down 1.4%, while France's CAC has lost 1.5% and Italy's FTSE MIB has shed over 2%.

Risk is firmly off this morning with European stock markets slipping in early trade, led lower by the travel and energy sectors. US futures are weaker after Friday saw the first down week on Wall Street in four.

Bank earnings were strong, but markets have already discounted an exceptionally strong reporting season. Meanwhile concerns about variants, rising cases and declining vaccine efficacy are all conspiring to knock confidence.

8.47am BST

On the smaller FTSE 250 index, cruise operator Carnival has slumped by 7.8%, with cinema chain Cineworld down 5.4% and budget airline easyJet losing 6.3%.

Restaurant Group, which owns the Wagamama and Frankie & Benny's chains, are down nearly 5%, while transport group National Express have dropped by 4.5%

8.28am BST

There's no reopening bounce in the City either - with shares falling sharply at the start of trading.

The FTSE 100 index of blue-chip shares has tumbled by 90 points, or over 1.25%, to 6917 points - its lowest level since mid-May.

There was a great deal of optimism over the summer reopening, however as we look ahead to the rest of the year and look at how Delta variant infections are rising, some of that optimism is dissipating.

8.13am BST

The pound has fallen to a three-month low against the US dollar.

Sterling has dropped by half a cent to $1.372, its lowest since April, as concerns over the pandemic hit the currency - on the morning that restrictions are lifted in England.

The reopening is occurring as delta-variant cases explode in the UK, and I expect nerves over whether this is the dumbest post-pandemic policy decision ever to cap gains in Sterling this week.

7.54am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Rising concerns about the Covid-19 pandemic are weighing on the markets, on the day England lifts its remaining coronavirus restriction despite warnings that the move could allow new variants to emerge.

Economists at Bank of America have downgraded their forecasts for U.S. economic growth to 6.5% this year, from 7% previously, but maintained their 5.5% forecast for next year.

As for inflation, the bad news is it's likely to remain elevated near term," they said in a note, pointing to their latest read from their proprietary inflation meter which remains high.

Asian shares extend losses on renewed virus scare, inflation woes https://t.co/efzZezCNJu pic.twitter.com/N5bqVqmFcC

There are clear signals that the markets feel a little unsettled about the global economic outlook. Of course, this isn't to suggest that a rapid or imminent crash is upon us. But that perhaps after 6-9 months of unbridled optimism, underpinned by extraordinary stimulus and the vaccine roll-out, perhaps the best part of the economic expansion has been seen already, and the tippy-top of the cycle is foreseeable and has been priced-in.

Maybe it's a misattribution, and perhaps it is due to what may prove to be temporary factors tied back to the spread of the Delta-variant. Nevertheless, the price signals are there for a growth slow down, with market participants currently being forced to mull the question what next?".

Broad risk-off move in European futures#FTSE 6944 -0.92%#DAX 15424 -1.31%#CAC 6412 -0.75%#AEX 730 -0.86%#MIB 24523 -1.09%#IBEX 8388 -1.63%#OMX 2321 -0.98%#STOXX 4001 -1.37%

With restrictions being lifted and cases rapidly increasing, we urgently need a surefooted approach from government.

Building and maintaining confidence is key to securing the economic recovery. Mask-wearing in enclosed spaces, especially transport, will help create confidence for both staff and customers, as will clarity around the future availability of free testing for employees."

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