European stock markets closed lower on Monday, with London’s benchmark index falling into the red despite coronavirus restrictions easing further in England, Wales and most of Scotland.
From Monday, millions of people in the UK can socialise indoors under under next stage of the roadmap out of lockdown. This includes mixing inside pubs and restaurants, and cinemas.
The ban on foreign travel has also been lifted and replaced with new rules.
However, the prime minister warned that people still needed to be cautious, and should get tested twice a week.
"Together we have reached another milestone in our road map out of lockdown, but we must take this next step with a heavy dose of caution," Boris Johnson said.
He added: "Everyone must play their part by getting tested twice a week, coming forward for your vaccine when called, and remembering hands, face, space and fresh air.
"I urge everyone to be cautious and take responsibility when enjoying new freedoms today in order to keep the virus at bay."
Watch: England reopens indoor venues
Despite the lifting of lockdown restrictions, the FTSE was held back on Monday by a stronger pound which was up against the dollar (GBPUSD=X) at $1.4113 and concerns over the Indian variant of COVID-19 rising in the UK.
“Last week we saw further signs of a rebound in business and consumer confidence as the next stage of the economic reopening came into view, however this could well be tempered by concerns about the small outbreaks of the Indian variant, that might threaten the easing timetable and the next stage of reopening next month,” Michael Hewson of CMC Markets said.
Britain is currently just five weeks away from COVID rules being lifted altogether.
Elsewhere, Hollywood Bowl (BOWL.L) sank to a £14.5m pre-tax loss in the six months to the end of March as its lanes remained closed due to lockdown restrictions.
Revenues during the period fell from £69.2m to £12m,however the company said that it was hopeful for a rapid recovery as its reopens in England for the first time this year.
“It’s a big day for many businesses as the UK lifts more COVID-related restrictions. This should have been cause for celebration, but all eyes are on the Indian variant and whether the government is going to impose new lockdowns, be it localised or national,” says Russ Mould, investment director at AJ Bell.
“Businesses will have to make hay while the sun shines, albeit interspersed by lots of dark clouds."
On Friday data in the US showed that retail sales were unchanged last month, after a surge of spending in March. On an annual basis, retail spending was up 51.2% in April. Separately, US consumer confidence fell unexpectedly this month as Americans grow more concerned about rising prices.
“The US economy and stocks continue to show remarkable resilience in the face of challenges that are typical of an exit from a major crisis,” John Stoltzfus, chief investment strategist at Oppenheimer, wrote in a note.
“Near term, markets may find themselves with ‘no particular place to go’ until Q2 earnings season provides clarity on corporate results and guidance.”
Asian stock markets ended mixed overnight as data on Chinese retail sales missed expectations, although industrial output hit targets.
Retail sales in China rose 17.7% in April compared with a year ago, falling short of forecasts for a jump of 24.8%. Industrial output matched expectations with a rise of 9.8%.
The spread of coronavirus in Singapore has caused the country to shut most schools from Wednesday after reporting the highest number of local infections in months.
On Monday, Taiwan's government had to reassure investors it would stabilise stock and foreign exchange markets if needed amid a spike in COVID-19 cases.
Japan's Nikkei (^N225) lost 0.9pc, having slumped to its lowest level since early January last week. Japan's wholesale prices jumped 3.6% in April from a year earlier as rising energy and commodities costs ate into corporate margins.
Watch: Singapore tightens COVID-19 curbs amid case spike