[Source: BBC]
Stock markets across the world have fallen sharply after the discovery of a new Covid variant raised fears over the economic recovery.
The FTSE 100 index of leading UK shares closed 3.7% down, while main markets in Germany, France and the US also sank.
Shares in airlines and travel firms were hit hard, with BA-owner IAG and Wizz Air down 15%. Tui shed 10%.
The UK and other nations have introduced a ban on flights from six southern African countries.
UK Health Secretary Sajid Javid said scientists were “deeply concerned” about the new Covid strain and its potential to evade immunity.
The UK has temporarily banned flights from South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini starting from midday on Friday until 04:00 on Sunday.
All six counties are being added to the UK’s travel red list. It means that any British or Irish resident arriving from the countries after 04:00 on Sunday will have to quarantine in a hotel, with those returning before that being asked to isolate at home.
The FTSE 100 index suffered its biggest one day drop in more than a year. Shares of major UK lenders HSBC, Lloyds Bank, NatWest and Barclays all fell about 7% as investors scaled back expectations of a Bank of England interest rate rise in December.
The biggest FTSE 100 riser was food delivery firm Ocado, up 4.5%, on anticipation that online firms could be a beneficiary if tighter restrictions are reintroduced.
Cruise operator Carnival suffered a 15% slide, making it the biggest faller on the FTSE 250, while EasyJet tumbled 11.5%.
Neil Wilson, chief market analyst at Markets.com said investors fear a new Covid variant “will lead to fresh lockdowns, mobility restrictions and lower economic growth”.
On Wall Street, the Dow Jones index slumped 2.8% in its shortened trading day following Thursday’s Thanksgiving holiday.
“It’s Black Friday today for the retailers, but it’s ‘Red Friday’ right now for the stock market,” said Patrick O’Hare at Briefing.com.
Concern the new variant could slow global economic growth sent oil prices sharply lower. US WTI crude tumbled 11.3% to $69.53 per barrel, while European benchmark Brent retreated 10.2% to $73.81. The price of gold, a haven for investors in troubled times, rose.
Despite the fall in the FTSE 100, the index is still trading nearly 12% higher than it was a year ago.
