Supermarket Morrisons has led declines on London's blue chip share index and sparked falls among its grocery rivals after revealing a heavy hit from the pandemic.

The Bradford-based retailer saw shares drop 5% after results showing it booked £155 million in costs related to the crisis, which knocked profits despite surging grocery sales.

The wider FTSE 100 Index closed 9.5 points lower at 6003.3, losing nearly all of its early session gains as the Dow Jones Industrial Average on Wall Street also struggled to make headway.

The European Central Bank (ECB) did little to boost investor spirits, despite holding rates as expected and predicting the eurozone would contract by a better-than-first-thought 8% this year.

The Dow was around 30 points lower around the time London closed, while across Europe the Dax in Germany finished 0.2% lower and France's Cac 40 was 0.4% down.

It was yet another bad day for the pound, which fell to new six-and-a-half-week lows against the dollar as no-deal Brexit fears ramped up.

Sterling fell 0.9% to 1.287 US dollars and was 1.8% lower at 1.08 euros, as the single currency received a boost from the ECB announcement.

Among stocks, it was the supermarket sector's turn to suffer a shares beating, after the latest figures from Morrisons.

The group closed 9p lower at 186p after it said pre-tax profits slipped by 25.3% to £148 million in the six months to August 2.

This saw FTSE 100 rival Sainsbury's drop 2% lower, off 3.9p to 187.9p, while Tesco also shed around 2%, down 3.6p to 220p.

David Madden, market analyst at CMC Markets, said: "The pandemic has proved to be a double-edged sword for most retailers that stayed open during the crisis, because health and safety overheads jumped."

But it was a better session for electricals retailers Dixons Carphone, which saw shares surge 7% after it revealed online sales more than tripled while stores were closed, and have continued to trade at twice last year's levels since high streets reopened.

The group lifted 6.1p to 88p in the FTSE 250 Index.

Fellow second-tier stock Dunelm saw contrasting fortunes in a mixed session for retailers, as the homewares chain revealed full-year pre-tax profits fell 13.3% to £109.1 million - knocked by shop closures amid the lockdown.

Shares in Dunelm fell 8% or 122p to 1,341p.

Airlines were once again at the front of investors' minds, with British Airways owner IAG the latest to announce capacity cuts in the face of an ever-expanding quarantine list of countries.

It also launched its a 2.75 billion euro (£2.5 billion) rights issue to help shore up its finances and weather the coronavirus crisis.

IAG finished unchanged at 200.4p, having initially seen share falls earlier in the day.

Budget rival easyJet broke its losing streak despite the IAG capacity cut news, gaining 1% or 7.6p to 592.4p in the FTSE 250.

The biggest FTSE 100 risers were GVC up 27.4p to 866.8p, Compass ahead 40.5p at 1293p, Persimmon 68p stronger at 2539p and ITV 1.6p higher at 64.2p.

The biggest FTSE 100 fallers were Morrisons down 9p at 186p, DS Smith off 9.7p at 280.3p, British Land 11.5p lower at 342.4p and Sainsbury's 3.9p weaker at 187.9p.