Market report

Markets plunge on Africa’s Covid variant scare


5pm: Markets plunge

The FTSE 100 closed 266.34 points (3.64%) lower at 7,044.03 as investors fled equity markets over the potential economic impact of the new Covid variant.

Wall Street took the baton from Europe and the Dow Jones Industrial Average was down over 950 points, or 2.7% at the time of London’s close, while the broader S&P 500 index and the tech-laden Nasdaq Composite both dropped over 2%.

Craig Erlam, senior market analyst, UK & EMEA, at OANDA commented: “Risk assets are getting pummelled at the end of the week as a new Covid variant sparks fears of new restrictions and lockdowns.

“The most worrying thing about the new strain at the moment is how little we know about it, with early indications being that it could be more problematic than delta.

“The biggest fear is that it will be resistant to vaccines and be a massive setback for countries that have reaped the benefits from their rollouts.”

He added: “We’ll no doubt learn more in the days and weeks ahead but for now, fear of the unknown will weigh heavily going into the weekend and could carry over into next week.

“We’re seeing a typical flight to safety in the markets with equities, commodity currencies and oil getting whacked and traditional safe havens like bonds, gold, the yen and swissy getting plenty of love.”

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