FTSE 100 set for worst week since October-end on lockdown worries; Indivior jumps

British shares dropped on Friday and were poised for their worst week since October-end, as fresh lockdowns and surging COVID-19 cases dampened hopes of a swift economic recovery, while drugmaker Indivior gained on higher revenue forecast.

British shares dropped on Friday and were poised for their worst week since October-end, as fresh lockdowns and surging COVID-19 cases dampened hopes of a swift economic recovery, while drugmaker Indivior gained on higher revenue forecast. The blue-chip FTSE 100 index fell 0.4%, with mining and construction stocks declining the most.

"The UK equity market is currently trading at a discount and quite attractive to global investors, but it seems to be holding out for now as the third wave of coronavirus infections and a weaker economy are weighing heavily on market sentiment," said Roland Kaloyan, a strategist at SocGen. The British economy will take more than two years to recover to its pre-coronavirus level, a Reuters poll found, with more than 70 economists saying it would contract 1.4% this quarter.

The FTSE 100 index was down about 1.5% for the week as a new wave of coronavirus infections sparked fresh restrictions, with most sectoral indexes set to record losses. The domestically focussed mid-cap index dropped 0.6% for the day and was on track to record its worst week since Dec. 11.

The UK economy shrank by 2.6% in November, its first monthly fall in output since the depths of an initial COVID-19 lockdown in April, as new movement restrictions were imposed, but the drop was much lower than the average forecast. Among individual stocks, aircraft parts supplier Meggitt gained 2.5% after saying the recent launch of COVID-19 vaccines and pent-up demand could support a recovery in civil aviation this year.

Indivior Plc surged 11.2% after raising its annual revenue forecast, while AstraZeneca slipped 0.4% even after its cancer drug Imfinzi received approvals in Europe and Britain. Oilfield services provider Petrofac tumbled 20.5% after Britain's Serious Fraud Office said a former senior executive of the company pleaded guilty to three bribery offences in relation to oil deals in the United Arab Emirates.