London stocks fall as COVID-19 curbs cloud positive earnings

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The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

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  • Travel stocks hit by new restrictions
  • Cardboard maker DS Smith jumps on strong H1 profit
  • Balfour Beatty gains on strong results
  • FTSE 100 down 0.2%, FTSE 250 rises 0.4%

Dec 9 (Reuters) - UK shares closed lower on Thursday as worries about the impact of tougher COVID-19 restrictions in England hit the travel sector and overshadowed a clutch of positive earnings reports.

The blue-chip FTSE 100 (.FTSE) was 0.2% lower, while the domestically focussed mid-cap index <.FTMC> lost 0.4%.

Airline stocks Wizz Air (WIZZ.L), EasyJet (EZJ.L) and British Airways-owner IAG (ICAG.L) fell more than 2% each, after British Prime Minister Boris Johnson imposed tougher COVID-19 restrictions in England on Wednesday. read more

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"Every indication so far is that Omicron is not as harmful as some of the other variants. It just spreads more quickly," said Danni Hewson, financial analyst at AJ Bell.

"The travel sector is being hammered ... people are looking at it and thinking anything connected with travel is going to be impacted."

Market participants are now awaiting a policy meeting from the Bank of England, with expectations that the central bank will wait until early next year before raising borrowing costs, later than previously expected. read more

"There may be some marginal benefit in waiting for new information on the Omicron variant, including its impact on infections, hospitalisations and vaccine efficacy," said Sanjay Raja, senior economist at Deutsche Bank.

Transport company FirstGroup (FGP.L) fell 5.7% after warning of uncertainty in its recovery pace because of new restrictions imposed in England, with passenger numbers on its buses slipping in recent weeks. read more

Rolls-Royce (RR.L) declined 3.4% and was at the bottom of the blue-chips index on fears that a drop in air travel could hit its business that makes and maintains aircraft engines. read more

Drugmaker AstraZeneca (AZN.L) rose 0.9% after U.S. health regulators authorized the use of its antibody cocktail to prevent COVID-19 infections. read more

Cardboard maker DS Smith (SMDS.L) gained 1.2% after posting an 80% surge in first-half profit and declaring a higher interim dividend.

Infrastructure company Balfour Beatty (BALF.L) gained 2.3% after doubling its revenue in the first half of 2021.

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Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva and Lisa Shumaker

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