The FTSE 100 dropped 0.3 per cent, to 6695.07, while the FTSE 250 declined 1 per cent, to 20596.91
Travel stocks suffered another torrid day as fresh worries about coronavirus sent stock markets around the world into a tailspin.
British Airways owner IAG was the biggest faller on the FTSE 100 as its shares dived 3.4 per cent, or 5.35p, to 151.6p amid fears that tighter travel restrictions are on the way to stop the spread of Covid-19.
On the FTSE 250, holiday firm Tui was down 16.7 per cent, or 70.6p, to 352p while Easyjet traded down 3.3 per cent, or 26.6p, at 780.6p.
With summer holidays under threat, the sell-off was echoed on the Continent as German airline Lufthansa fell 2.7 per cent and Air France KLM dropped 2.5 per cent.
Travellers around the world are facing tough new rules that mean they must take a Covid test before departure and undergo a period of quarantine on arrival. Speculation is mounting that the UK may close its borders altogether.
Hopes of an early end to lockdown are also fading despite the rollout of vaccines – sparking fears of a double-dip recession and delayed recovery.
The FTSE 100 fell 0.3 per cent, or 20.35 points, to 6695.07 points, while the FTSE 250 was down 1 per cent, or 196.81 points, to 20596.91.
The FTSE 100 is drifting back towards the levels seen at the start of 2021 as any optimism over Brexit resolution and vaccine roll-out is swamped by the seemingly endless Covid-19 crisis, said AJ Bell investment director Russ Mould.
The Prime Minister’s refusal to flatly rule out an extended lockdown, as rumours of a gradual reopening from May started to swirl, has knocked sentiment toward those firms that would benefit most from increased movement, he said.
Trainline fell 5 per cent, or 22.2p, to 425.8p while WH Smith, which has shops in train stations and airports across the country, was down 3.3 per cent, or 58p, to 1725p.
Shopping centre owner Hammerson – whose tenants are struggling to survive while their stores are closed – fell 6.2 per cent, or 1.35p, to 20.35p.