Britain has become the first country to approve the University of Oxford and AstraZeneca’s COVID-19 vaccine, but a rapidly spreading mutant strain of the virus is worrying investors.
British stocks ended lower on Wednesday, reversing early gains as fears over a new, rapidly spreading strain of the coronavirus led most of the country to come under tighter restrictions, even as Britain has approved AstraZeneca’s COVID-19 vaccine.
The blue-chip FTSE 100 lost 0.7% after hitting a new 10-month high in the previous session.
Miners and consumer stocks, mainly Rio Tinto, Anglo American, Diageo were the main drag on the index.
Health Secretary Matt Hancock said on Wednesday that more parts of England would be subject to the more stringent COVID-19 restrictions as a highly infectious variant of the virus spreads across the country.
“More lockdowns don’t help short-term market sentiment. It will have an economic ripple effect, ”said Russ Mold, director of investments at AJ Bell.
Britain struggles to contain the coronavirus pandemic, with the country recording one of the world’s highest death rates of around 65,000 as of mid-December, while the emergence of a more virus variant infectious disease worsened her problems.
Britain on Wednesday became the first country in the world to approve the coronavirus vaccine developed by the University of Oxford and AstraZeneca, in the hope that swift action will help it stem a record outbreak of infections .
AstraZeneca shares closed 0.8% lower.
“AstraZeneca said he would not be looking to profit from the vaccine, which is fantastic for the company, but the market sees him as selfish and ungrateful,” Mold said.
The mid-cap FTSE 250 index, seen as a barometer of Brexit sentiment, fell 0.9%, although UK lawmakers approved Prime Minister Boris Johnson’s post-Brexit trade deal with the European Union.
In a positive turn for the economy, UK house prices rose faster than expected in December to register their biggest annual increase in six years, mortgage lender Nationwide said.
In company news, Energean rose 3.8% after announcing it would acquire the remaining 30% of its Israeli offshore fields.