UK mid-caps fall as new COVID restrictions hit pubs, restaurants

The FTSE 100 has gained nearly 19% from its March lows as Britain lifted a nationwide lockdown, but the export-heavy index is still about 23% below its pre-pandemic highs as surging COVID-19 cases threaten a nascent business recovery. In company news, shares in Britain's biggest domestic bank Lloyds edged lower as it said it was making 865 redundancies, with lenders resuming cost-cutting measures to ride out the impact of the pandemic.

London's mid-cap equities index slipped for a second straight day on Wednesday as British Prime Minister Boris Johnson geared up to announce new restrictions on social gatherings in England to tackle a surge in COVID-19 cases. Pub and restaurant owners including J D Wetherspoon Plc , Marston's Plc and Restaurant Group Plc fell between 2.5% and 7.9% as Johnson prepared to ban groups of more than six people from meeting.

The mid-cap FTSE 250 index slipped 0.5%, widely underperforming a 0.7% jump in European stock markets, while the domestic travel and leisure index lost 2.0%. "The new social restrictions have led to some panic selling, especially in some restaurant and pub stocks, with the possibility of further downfall if more Draconian restrictions are imposed," said Keith Temperton, a sales trader at Forte Securities.

Meanwhile, export-heavy firms propped up the blue-chip FTSE 100 as the pound slid to a six-week low after new UK legislation on post-Brexit plans stoked fears of a derailment of trade talks with the European Union. Gains on the index were limited as AstraZeneca Plc's 1.5% decline weighed after the company said an unexplained illness in a study participant had led it to pause global trials of its experimental coronavirus vaccine.

Hopes for vaccines and treatments to address the pandemic have helped lift global equity benchmarks after a crash earlier this year. The FTSE 100 has gained nearly 19% from its March lows as Britain lifted a nationwide lockdown, but the export-heavy index is still about 23% below its pre-pandemic highs as surging COVID-19 cases threaten a nascent business recovery.

In company news, shares in Britain's biggest domestic bank Lloyds edged lower as it said it was making 865 redundancies, with lenders resuming cost-cutting measures to ride out the impact of the pandemic.

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