European stocks plummet as fears of new Covid variant bite

Investors flee riskier assets as travel companies hit

Glanbia and Kerry Group were  marginally off, closing down 0.83 per cent and 0.32 per cent respectively.

Glanbia and Kerry Group were marginally off, closing down 0.83 per cent and 0.32 per cent respectively.

 

European stocks plummeted amid widespread selling on Friday, as reports of a newly identified and possibly vaccine-resistant coronavirus variant identified in South Africa stoked fears of a fresh hit to the global economy and drove investors out of riskier assets.

Dublin

The Irish index of shares ended the day in the red, almost 4.5 per cent down at 7834.

Ryanair stock tumbled 12 per cent to €14.04, in line with global travel stocks, which bore the brunt of the news of a potential variant of concern in the Covid-19 pandemic.

Banking stocks also dipped, with Bank of Ireland down 7.17 per cent to €4.716 over the day, while AIB was down more than 8 per cent to close at €1.918.

Building stocks were also hit, with CRH off 4 per cent at €43.70, and Kingspan marginally lower at €98.06.

Glanbia and Kerry Group were also marginally off, closing down 0.83 per cent and 0.32 per cent respectively.

London

The Ftse 100 suffered its worst one-day fall since the early days of the Covid pandemic on Friday, as investors ran for the hills with the new Covid strain at their heels. The index ended the day down 266 points, the biggest loss since late March 2020. It is a 3.6 per cent fall.

It was a tough showing for investors around the world and came after the UK imposed new travel restrictions on those coming from half a dozen countries in southern Africa where a new strain of the Covid virus has been identified.

On Friday the EU also recommended that its members should consider new restrictions.

Unsurprisingly airlines and other travel companies were among the worst hit on the day, with online supermarket Ocado being one of the only FTSE 100 companies to gain.

Like other online retailers, Ocado stands to gain heavily if there is another lockdown. Its shares were one of the biggest winners during the coronavirus lockdowns.

Europe

The benchmark Stoxx 600 index ended 3.7 per cent down in its worst session since June 2020, while the volatility gauge for the main stock market hit a near 10-month high.

The day’s losses saw the Stoxx 600 lose 4.5 per cent this week.

Little is known of the variant detected in South Africa, Botswana and Hong Kong, but scientists said it has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.

France’s CAC 40 shed 4.8 per cent, while Germany’s DAX fell 4.2 per cent and Spain’s IBEX lost 5.0 per cent.

Among the European stock sectors, travel and leisure plummeted 8.8 per cent in its worst day since the Covid-19 shock sell-off in March 2020.

Britain announced a temporary ban on flights from South Africa and several neighbouring countries from 1200 GMT on Friday. The European Union is also planning similar moves.

Travel stocks were the worst performers this week, down 13.6 per cent. Concerns over rising Covid-19 cases had pulled European stock markets from record highs last week amid fears of more restrictions.

New York

US stocks slid as a post-Thanksgiving sell-off spread across global markets .

Cyclicals and small-caps took the brunt of the selling, with the S&P 500 Index heading for its worst day since February, while the Russell 2000 sank more than 4 per cent.

Travel and leisure stocks tumbled, while stay-at-home shares gained. That helped ease losses in the Nasdaq 100, which was still down 1.8 per cent. Oil tumbled through $70 a barrel in New York for the first time since late September.

Carnival and Royal Caribbean Cruises lost at least 9 per cent each while United Airlines Holdings dropped 10 per cent. Zoom Video Communications and Peloton Interactive were up at least 5 per cent.

In Europe, the Stoxx 600 index fell 3.7 per cent, the most since June 2020 on a daily basis. – Additional reporting: Bloomberg, Reuters, PA