Travel and holiday firms pulled back on London’s biggest markets as sentiment in the sector continued its recent drift.
British Airways owner IAG slipped to a four-month low as the prospect of a busy summer holiday season wilted further.
Sentiment had been low after the latest changes to the green, amber and red lists last week but took another hit on Monday after German Chancellor Angela Merkel reportedly made efforts to ban UK travellers from the EU due to recent rises in coronavirus case numbers.
The FTSE 100 closed 63.1 points, or 0.88%, lower at 7,072.97 on Monday.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have got off to a poor start to the week, as rising virus cases threaten to undermine sentiment as we come to the end of the month, the end of the quarter and the first half of 2021, with the energy sector, along with travel and leisure leading the losses.
“It’s been another difficult day for the travel and leisure sector today with the likes of IAG, easyJet, Ryanair and Tui all lower along with Air France-KLM and Lufthansa.”
Oil stocks also felt the impact of these concerns, with fears of a dip in demand from the travel sector weighing on the likes of BP and Shell.
Mr Hewson added: “Oil prices are slipping back ahead of this week’s Opec+ meeting as well as concerns that a rise in global cases, and new restrictions will act as a brake on the pace of global reopening.”
Brent crude decreased by 1.55% to 75 dollars per barrel.
Elsewhere in Europe, trading sentiment was also depressed by concerns over rising case numbers and the impact of recent strains.
The German Dax decreased by 0.34% and the French Cac moved 0.98% lower.
Across the Atlantic, Wall Street was more resilient, with the S&P and Nasdaq once again striding to record highs although the Dow Jones edged lower.
Meanwhile, sterling was broadly solid despite caution over the spread of the Delta variant.
The pound was 0.02% higher versus the US dollar at 1.389 and decreased by 0.05% against the euro to 1.164.
In company news, fashion giant Burberry sat at the foot of the FTSE 100 after shareholders were shaken as it confirmed chief executive Marco Gobbetti will leave the firm after five years.
The boss, who replaced Christopher Bailey in 2017, will leave the UK-based retailer to take up a new, unspecified role in Italy to be closer to his family, the company said.
Shares in Burberry plunged by 195p to 2,055p at the close of play.
Insurer Hiscox climbed after the firm agreed a settlement with a group of around 400 policyholders over business interruption losses due to lockdowns during the pandemic.
It saw shares rise by 31p to 880p after it struck a deal with the Hiscox Action Group, although the full details of the settlement will remain confidential.
The biggest risers on the FTSE 100 were AstraZeneca, up 167p at 8,666p, Avast, up 9.4p at 502.2p, Ocado, up 34p at 2,019p, and Rentokil, up 6p at 500.4p.
The biggest fallers on the FTSE 100 were Burberry, down 195p at 2,055p, IAG, down 11.08p at 176.4p, Rolls-Royce, down 6p at 100.5p, and British Land, down 20.6p at 498.2p.