LONDON: UK shares slipped from near two-week highs on Tuesday as a surge in US coronavirus cases turned investors away from riskier trades, while Halfords tumbled after a bleak profit expectation.

The motor and cycling products retailer plunged 14.1% and posted its worst day in more than three months as it expects a profit scenario ranging from zero to a pretax loss of 10 million pounds ($12.5 million).

The export-laden FTSE 100 fell 1.5% wiping out most of Monday's gains, while British mid-caps dropped 1%, with banks leading declines.

"Investors are getting back to the reality of rising coronavirus cases, which is causing some caution and fear to be back following yesterday's rally," said David Madden, analyst at CMC Markets in London.

Newspaper publisher Reach tumbled 14.2%, logging its worst day since late March as it said it would cut about 550 jobs - 12% of its workforce - after the Covid-19 pandemic hit circulation and advertising.

Premier Inn owner Whitbread fell 5.5% on reporting an 80% plunge in first-quarter sales as the Covid-19 lockdown shuttered most of its hotels in Britain and Germany.

Online trading platform Plus500 rose 3.3% after saying revenue in the first half nearly quadrupled.