UK shares plunge as Omicron fears hit investors

The FTSE 100 was down 1.8 per cent and the FTSE 250 off 2.0 per cent

Fears of Omicron have caused investors to have low confidence. The variant is doubling in the UK every two-three days, the government says. Photo: AP

The UK's FTSE 100 dropped significantly on Monday, tracking a drop in global equity markets as investors worried about a surge in Covid-19 cases due to the Omicron variant in Europe and the US.

The blue-chip FTSE 100 index declined 1.8 per cent to hit a two-week low in early deals.

Oil majors BP and Royal Dutch Shell fell nearly 2.5 per cent each after crude prices dropped $2 a barrel, while industrial metal miners lost 2.5 percent due to weakness in copper prices.

The domestically focused mid-cap index fell 2.1 per cent, with the travel and leisure sector leading the declines with a 3.2 per cent drop.

The fall was recorded after reports British Prime Minister Boris Johnson and his Cabinet were urged by the government's chief scientific adviser Sir Patrick Vallance to tighten restrictions.

Sir Patrick is said to have given a warning that new measures are needed as soon as possible to stop the National Health Service being overwhelmed. Around 10 ministers are understood to be opposed to new measures, including Mr Johnson and Chancellor Rishi Sunak.

On Monday morning, Dominic Raab, Britain’s Justice Secretary and Deputy Prime Minister, refused to rule out more restrictions between now and Christmas.

He said so far 12 people who tested positive for Omicron have died in the UK while there are 85 people in hospital with the strain.

He said Britons would have a “much better Christmas than last year” because of the high rate of adults who are vaccinated and the swift moving booster campaign.

However, he stopped short of ruling out restrictions on household mixing.

“A lot of the modelling which is being thrown around is the worst case scenario which of course we are duty-bound to consider,” he told Sky News.

“But we ultimately come back to this point, you have to test the data in real time against real cases and see that lag between the spread of cases, hospitalisations and what does it mean for severity in terms of, tragically, the number of deaths.”

He told BBC Radio 4’s Today programme that people should use their own judgement when deciding what gatherings to attend.

“Some common sense caution is well-advised but people will make that judgement based on their own circumstances, who they’re mixing with,” he said.

But he stopped short of saying new restrictions were around the corner, adding: “I’m not going to trail things where decisions haven’t been made.”

Standard Chartered fell 1.9 per cent after the Bank of England fined it £46.55 million ($61.51 million) for misreporting its liquidity position to the regulator and for failings in its controls.