Fears over Delta variant see £ 54bn wiped off FTSE100 as markets tumble worldwide
Markets around the world were in free fall amid growing fears about the spread of the Delta Covid variant.
In total, £ 54 billion was wiped off the FTSE 100 as the index fell 2.3%, or 163.70, points to 6,844.39 at the close.
The plunge followed steep overnight drops in Asia and Paris and Frankfurt, with the Cac 40 and Dax both falling by more than 2%.
Delta fears: A total of £ 54bn was wiped off the FTSE 100 as the index fell 2.3%, or 163.70, points to 6,844.39 at the close
The sell-off continued until the New York session, where the Dow Jones lost 3%, the S&P 500 lost 2% and the Nasdaq fell 1.5%.
The losses marred “Freedom Day” in England, which saw a series of restrictions lifted, including the need to wear face masks in most public spaces.
But while owners of pubs, restaurants and gyms applauded the moves, investors were far more concerned about the Delta variant, which scientists say is more transmissible than previous strains of the virus.
The falls in Europe were triggered by ministers from the continent hinting that curfew measures could be reimposed if infections continue to climb.
In Israel, there are worrying suggestions that the Covid vaccine could lose its effectiveness in the elderly, with the Hebrew University of Jerusalem reporting that 90% of confirmed cases in those over 50 were people who had been fully vaccinated. .
“It is the awareness of the market that we are moving from a clear V-shaped recovery to something much more uncertain,” said Mohammed Kazmi, portfolio manager at Union Bancaire Privée.
“The hope was that the vaccines would provide us with the end of the game. Now investors are looking at the UK and there is some fear of such an aggressive reopening when cases are still so high.
The largest declines occurred in the airline and travel sectors.
British Airways owner IAG was down 5.2%, 8.78p, to 159p, while Easyjet was down 6.7%, or 54.2p, to 770p.
Engineers were also hit and Rolls-Royce fell 6.5%, or 6.06p, to 87p.
Cruise operator Carnival lost 8.3%, or 117p, to close at 1297.2p and vacation operator Tui fell 3.8%, or 12.2p, to 308.7p.
One of the few risers in the FTSE 100 was the Just Eat Takeaway food delivery app (up 3.3%, or 190p to 6034p), a company that has performed well during the pandemic when people are stuck. at home.
Inflation fears have loomed over the markets as well and there has been a lot of talk in the trading rooms as to whether central banks in the United States and the United Kingdom may seek to curb quantitative easing in the months. to come up.
Inflation has increased in recent months and economists who previously said it would be “transient” have started to change their minds.
Neil Wilson, Analyst at Markets, said: “We are sadly back to the bad old days. Many investors would have hoped days like these were behind us.
“It’s clear the point of view now is that Covid is here for the long haul.
“People who thought they were vaccinated thought they had become invincible.”