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FTSE 100 plummets

Markets plunge as new Covid variant emerges

Pre-departure Covid tests

Testing will be required

Investor panic began to spread around the world following concern over a possibly vaccine-resistant variant of Covid.

The FTSE 100 plunged 211.37 points (2.89%) to 7,099 at the open with travel and hospitality related stocks leading the retreat. British Airways owner IAG was down 11% and Intercontinental Hotels Group 7% in early trade.

Asian stocks suffered their sharpest drop in three months and oil prices tumbled after the detection of the variant, called Nu, sending investors to seek safety in bonds, the yen and the dollar.

Japan’s Nikkei 225 is off 768 points at 28,731 while in Hong Kong, the Hang Seng is down 565 points at 24,175. Brent crude was trading at $78.89 a barrel, down $2.03.

The new variant has prompted the UK to impose travel restrictions on those arriving from six African states.

Little is known of the B.1.1.529 variant, detected in South Africa, Botswana and Hong Kong, though scientists said it has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible. There are questions about the effectiveness of vaccines against it.

Jeffrey Halley, analyst at Oanda in Jakarta, told the Reuters agency: “The one bull in the China shop that could truly derail the global recovery has always been a new strain of COVID-19 that swept the world and caused the reimposition of mass social retractions.

“All we know so far is the B.1.1.529 is heavily mutated, but markets are taking no chances.”

Mark Arnold, CIO at Hyperion Asset Management in Brisbane, said: “I don’t think there’s any going back to the pre-COVID world. We’re just going to get mutations through time and that’s going to change the way people operate in the economy. That’s just reality.”

All travellers arriving in the UK from six southern African countries will have to self-isolate and take two PCR tests from mid-day today, regardless of their vaccination status.

Hundreds of people who have recently returned from South Africa, where the variant was detected, and neighbouring countries are expected to be tracked down and offered tests in an effort to avoid the new variant entering the UK.

Anyone who has arrived in Scotland from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe and Botswana in the previous 10 days will need to enter Managed Quarantine hotel on arrival to Scotland and will need a day two and day eight coronavirus (COVID-19) PCR test regardless of their vaccination status.

Cabinet Secretary for Net Zero, Energy and Transport Michael Matheson said: “International travel restrictions are necessary to protect the greater public health.

“While many restrictions have been significantly relaxed… we have always said it may be necessary to quickly impose fresh measures to protect public health in Scotland.”

More information on international travel and quarantine

There are no direct flights from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe or Botswana into Scotland.

Changes to travel restrictions for arrivals from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe or Botswana will come into effect from 12 noon on Friday 26 November.

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