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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”.

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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.

The US dollar has also lost ground today, with pandemic worries making an earlier rise in US interest rates less likely.

The dollar is down 1% against the euro, which has risen to $1.132. Earlier this week, the euro hit a 16-month low against the greenback.

But, the emergence of a new Covid strain that puts the recovery in some doubt has prompted a sharp reversal in equities, bonds and FX markets, point out analysts at MUFG Bank.

They write:

For most of the week, market participants had been pricing in more rate hikes especially in the US encouraged by the ongoing hawkish shift in Fed rhetoric.

However, those expectations for faster Fed rate hikes have reversed sharply at the end of this week in response to fears over further COVID-related disruption from the “Nu” variant that is feared may have a higher risk of evading vaccine protection.

US crude has sunk below $70 per barrel for the first time since September.

It’s down over 11% today, as oil markets are hit by heavy selling.

The oil price has now plunged by 9% today, as concerns over the B.1.1.529 variant rip through the markets.

Brent crude has fallen to as low as $74.64 per barrel, a new two-month low, on fears that new pandemic curbs could be brought in, such as travel restrictions.

Fawad Razaqzada, market analyst with ThinkMarkets, says:

Crude oil and travel stocks took the brunt of the sell-off on Friday amid concerns the new variant will prompt fresh mobility restrictions and hinder economic activity. The UK was swift to announce a temporary flight ban from a number of southern African countries.

If more countries follow suit, we could see demand for air travel fall. This, in turn could weigh on crude demand, just as the US and a few other oil consuming nations are releasing crude from their strategic reserves to add output to the global supply.