The introduction of local lockdowns and curfews in parts of England failed to scare away too many investors from the London Stock Exchange by the end of trading for the week.
But the blue-chip FTSE 100 index closed the day down 42.87 points, or 0.7%, at 6,007.05 – with traders waiting to see the impact from increases in coronavirus cases.
Investors are also waiting to see what the impact will be from a US ban on some Chinese apps in the country introduced on Sunday.
SpeadEx analyst Connor Campbell explained; “It is going to be interesting to see over the rest of September whether we return to a situation where daily covid-19 case and death figures from the UK and across Europe become market movers like they were at earlier points in the pandemic.”
Back in March, leading indexes plunged by record levels, with daily falls wiping billions off share prices, although it has since stages some recoveries.
In mainland Europe, the CAC 40 in Paris ended down 1.2%, while the DAX 30 in Frankfurt fell 0.7% Friday evening.
“The atmosphere across stock markets is turning sour as the weekend looms, as investors fret about possible retaliatory measures from China after the US announced a ban on key apps from Sunday,” IG Chief Market Analyst Chris Beauchamp said.
In company news, the biggest hits came in the airline and travel sector as the prospect of lockdown looked like impacting the October half-term school holidays.
British Airways and Aer Lingus owner, International Consolidated Airlines (IAG) saw shares fall 18.9p to 110.55p – a drop of 14.6%. Intercontinental Hotels also fell 194p to 4,137p and EasyJet fell 54.6p to 539.6p.
The moves followed news from Ryanair, which said it will cut capacity for October by 20% above the 20% cuts previously announced last month over EU changes on travel restrictions.
Banks also took a knock as talks over a possible Bank of England rates cut turning negative spooked some investors.
NatWest lost 3.17p to 96.88p; Barclays closed down 3.12p at 97.42p and Lloyds lost 1.015p closing at 25.24p.
The Office for National Statistics revealed retail sales were up in August for the fourth consecutive month, although they slowed month on month from 3.7% growth in July versus 0.8% growth in August.
The slowdown received mixed responses from investors, with clothes retailer Next down 172p at 6,254p; whilst Tesco closed up 4.4p at 219.6p and Asos closed up 62p at 5,06p.
Elsewhere, investment banking giant Investec confirmed 210 jobs at its London headquarters would go, reducing headcount in the capital by around 13% to “simplify and focus the business”.
The UK and South African firm said its performance in the five months to August 31 was impacted by lower average interest rates, reduced client activity and a 22% depreciation of the rand against the pound. Shares closed up 1.1p at 139.45p.
The biggest risers on the FTSE 100 were Fresnillo up 63 p at 1,343p; Pennon up 41p at 1,060.5p; Ocado up 105p at 2,817p; Evraz up 7.6p at 347.4p and Schroders up 60p at 2,840p.
The biggest fallers on the FTSE 100 were IAG down 18.9p at 110.55p; Polymetal down 117.5p at 1,763p; Rolls-Royce down 9.75p at 180.15p; Barratt Developments down 25.1p at 473.9p and WPP down 28.4p at 599.6p.