UK shares lag Europe on coronavirus worries, BAT slumps

UK stock markets edged lower on Monday as shares in British American Tobacco slumped on reports of a U.S. criminal probe, while signs that Britain will remain under lockdown for a longer period dented the mood. The blue-chip FTSE 100 index fell 0.35% by 0728 GMT, giving up early gains and underperforming its European peers as the UK government signaled that there would be no easing of lockdown measures this week.

A newspaper reported Britain's finance minister as saying the economy could shrink by up to 30% this quarter. The midcap index was down by about 1%.

British American Tobacco shed nearly 4% after a report the cigarette maker is under a criminal investigation by U.S. regulators over suspected sanctions-busting. Meanwhile, AstraZeneca's shares surged 7% after saying it would start a clinical trial to assess the potential of Calquence in the treatment of the exaggerated immune response associated with COVID-19 infection in severely ill patients.