The London markets wobbled into the red as virus concerns overtook initial optimism following the approval of the AstraZeneca and University of Oxford vaccine in the UK and the passing of the Brexit Bill in Parliament.
Stocks receded after the FTSE 100 had stormed to a new nine-month high on Tuesday after confirmation of the UK’s deal to exit the EU.
Sentiment slumped in the afternoon after the Government announced plans to place more areas of the UK into severe Tier 4 restrictions, weighing down on retail stocks.
The FTSE 100 closed 46.83 points lower at 6,555.82 at the end of trading on Wednesday.
Joshua Mahony, IG senior market analyst, said: “UK stocks are on the back foot despite the passing of the Brexit Bill, putting to bed fears of a no-deal Brexit when the UK leaves the EU on Thursday night.
“Unfortunately, it appears to be the case of a buy-the-rumour, sell-the-fact scenario.
“With a record 53,000 new cases yesterday, the UK remains on a sharp upward trajectory with no sign of turning the corner.
“The fear is that without a swift reversal in cases, there is a strong chance that the Government either lengthens or tightens restrictions further.”
Elsewhere in Europe, the other major markets also closed in the red amid the broad downturn in sentiment.
The German Dax was 0.31% lower and the French Cac moved 0.22% lower.
In the US, the three major indices all rallied due to impending stimulus and optimism driven by the ongoing rollout of coronavirus vaccines, as the US dollar slid to a two-year low.
Meanwhile, sterling soared higher on the back of weakness in the US greenback.
The pound increased by 0.77% versus the US dollar at 1.360 and was up 0.54% against the euro at 1.107.
Non-essential retailers such as Dunelm and Next dropped in value after changes to regional tiers across the country forced stores to shut their doors to customers.
In company news, shares in AstraZeneca closed lower despite UK regulators finally granting approval for its vaccine to be used.
The Government said the Medicines and Healthcare products Regulatory Agency (MHRA) had given the jab the green light, with 530,000 doses available for rollout from Monday. Shares in AstraZeneca closed 61p lower at 7,401p.
Elsewhere, Paddy Power owner Flutter increased in value after it completed its $4.2 billion (£3.1bn) deal to increase its stake in US fantasy sports firm FanDuel to 95%. Shares moved 25p higher to 15,300p.
Shares in outsourcing solutions business iEnergizer leapt after it inked a new $165 million (£121.2m) credit facility. It closed 33p higher at 303p as it confirmed “a further announcement on a return of cash to shareholders” will be made in due course.
The price of oil was broadly flat on Wednesday, nudging just 0.04% higher to $51.19 per barrel of Brent crude.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here