Europe close: Stocks dip as UK moves into lockdown, Germany prepares to tighten restrictions

European markets slipped as the UK imposed its third national lockdown and Germany prepared to extend measures to stymie a surge of coronavirus cases.

The pan-European Stoxx 600 was down 0.19% to 400.94, although London’s FTSE 100 was up 0.61% at 6,612.25. France’s CAC 40 slipped 0.44% to 5,564.60, and Frankfurt’s DAX was 0.55% lower to 13,651.22.

Britain on Monday evening ordered people to stay home and closed all primary and secondary schools until at least mid-February in response to a new UK variant of the virus.

UK Finance Minister Rishi Sunak announced a £4.6bn package of new business grants, allowing businesses in the retail, hospitality and leisure sectors to receive a one-off payment up to £9,000. There will also be an additional £594m discretionary fund to be made available to local authorities to support other businesses.

In Germany, reports stated that the government would extend the national lockdown by three weeks to the end of January. The has been under measures since December 16.

Wall Street’s main stockmarket indices were a bit higher following a heavy sell off overnight that saw the Dow Jones Industrials fall by 382 points on worries over the rising number of Covid-19 cases.

Investors were also eyeing runoff Senate elections in the state of Georgia where a tight race will determine who gains control of the upper chamber.

In equity markets, shares in fashion retailer Next were up 8% after the retailer reported a smaller-than-expected drop in sales over Christmas and said online sales made up for almost all those lost in retail stores. In the nine weeks to 26 December, full price sales declined 1.1% on last year, coming in ahead of the retailer’s central guidance for an 8% drop in its October trading update.

Online sales during the period rose 38%, with UK online sales up 36%, while retail sales slumped 43%.

German chipmaker Dialog Semiconductor gained 3% after an upbeat fourth-quarter revenue forecast due to strong demand for 5G phones and tablets.

Supermarket chain Morrisons gave up early gains after it reported a 9.3% rise in like-for-like sales over the key Christmas and New Year three-week period to January 3.

Shares in home-meal kit delivery company Hello Fresh jumped 7% after the lockdown news.

Royal Mail shares were boosted by an upgrade to ‘hold’ at Berenberg.