FTSE 100 suffers biggest fall since June 2020 as Covid variant fears shake markets – as it happened | Business

Time to wrap up, after a day in which world stock markets, oil, and risky assets such as cryptocurrencies have been hit hard by the discovery of a new coronavirus variant which could derail the global recovery.

Here’s today’s main stories:

Our main Covid-19 liveblog will be tracking the latest:

Wall Street’s fear index, the VIX, jumped by over 50% today — showing a very sharp increase in volatility.

The US stock market has closed, with heavy losses on a shortened session after the Thanksgiving holiday.

The Dow Jones industrial average has closed down 905 points, or 2.5%, at 34,899 points, its biggest one-day percentage drop since late October 2020.

American Express (-8.6%), Boeing (-5.4%) and Caterpillar (-4%) led the Dow fallers, in a global shift away from risky assets today.

The S&P 500 index fell 2.2%, its biggest one-day drop since February this year. Cruise operators and airlines led the fallers, including Royal Caribbean Cruises (-13%), Norwegian Cruise Line Holdings (-11.3%), Carnival Corp (-11%), United Airlines (-9.5%) and American Airlines (-8.8%).

The selloff was broad-based, with energy, financials, industrials, real estate and consumer discretionary sectors worst hit.

Pharmaceuticals bucked the selloff, though, with vaccine makers Moderna (+20.5%) and Pfizer (+6%) seeing strong gains.

“It is déjà vu all over again for like the eighth time,” said Keith Buchanan, senior portfolio manager at Global Investments in Atlanta (via Reuters):

“What we understand about this variant could accelerate over the weekend, if there is more concerning news than good news, a lot of people don’t want to be holding risk assets on Monday morning, or are afraid of what that could look like Monday morning.”

The World Health Organization has named the B.1.1.529 Covid variant Omicron and says an advisory group has recommended that it should be designated as “of concern”

In a statement, WHO said preliminary evidence suggests the latest variant carries a “higher risk of re-infection than other variants of concern”.

More here:

Around £13.5bn has been wiped off the FTSE 250 index of medium-sized and smaller firms today, as it tumbled by 3.2% in a selloff led by travel companies.

That’s on top of the £72bn knocked off the blue-chip FTSE 100 today.

European markets also had their worst day since June 2020.

The pan-European Stoxx 600 has closed down almost 3.7%, with travel stocks, banks, energy companies and miners all badly hit.

Germany’s DAX fell 4.15%, while France’s CAC index slid 4.75%

Worries over the B.1.1.529 variant have added to concerns that new lockdowns could be implemented to address rising Covid infection rates in some parts of Europe.

Peter Garnry, head of equity strategy at Saxo Bank, says (via Reuters):

“With Europe and some northern parts of the U.S. in a stretched situation due to an already high number of new cases and hospitalisations, this new virus strain comes at the worst possible time,”

“Equities are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain, and thus it increases risk of new lockdowns.”

Cruise operator Carnival led the fallers on the UK’s FTSE 250 index, sliding by 16% today on concerns that travel restrictions could be reimposed.

Budget airline easyJet has fallen by 11.5%, and rival Wizz Air lost 15%, while holiday operator TUI shed 10%.

The FTSE 250 index, which contains medium-sized companies, fell by nearly 3.2% today.

Oil giants have also tumbled sharply today, hit by the tumble in crude prices.

BP dropped by 7.8% and Royal Dutch Shell fell 5.6%.

Britain’s stock market has seen its biggest plunge in over a year, as investors ditch shares in companies most exposed to the pandemic after the discovery of the new coronavirus variant.

The FTSE 100 index has closed down 266 points, or 3.64%, which is its biggest one-day fall since June 2020.

It knocks around £72bn off the value of the blue-chip index, taking it to 7044 points, its lowest level in seven weeks.

Travel stocks were badly hit, with British Airways owner IAG ending the day down nearly 15%.

Jet engine maker and servicer Rolls-Royce has slumped by over 11%, followed by manufacturing group Melrose which lost 10%.

Hotel chain operators InterContinental (-9%) and Whitbread (-8.7%) were also in the top fallers, along with conference group Informa (-9%), and Standard Chartered bank(-8.9%).

Wall Street’s selloff is intensifying, with the Dow Jones industrial average now down 1,016 points or 2.85% at 34,788 points.

This puts the Dow on track for its worst drop of the year, points out CNBC, in a shortened trading day because of the Thanksgiving holiday.

The S&P 500 and the Nasdaq Composite are both down over 2% too.