Time to wrap up, after a day in which world stock markets, oil, and risky assets such as cryptocurrencies have been hit hard by the discovery of a new coronavirus variant which could derail the global recovery.

Here’s today’s main stories:

Our main Covid-19 liveblog will be tracking the latest:

The US stock market has closed, with heavy losses on a shortened session after the Thanksgiving holiday.

The Dow Jones industrial average has closed down 905 points, or 2.5%, at 34,899 points, its biggest one-day percentage drop since late October 2020.

American Express (-8.6%), Boeing (-5.4%) and Caterpillar (-4%) led the Dow fallers, in a global shift away from risky assets today.

The S&P 500 index fell 2.2%, its biggest one-day drop since February this year. Cruise operators and airlines led the fallers, including Royal Caribbean Cruises (-13%), Norwegian Cruise Line Holdings (-11.3%), Carnival Corp (-11%), United Airlines (-9.5%) and American Airlines (-8.8%).

The selloff was broad-based, with energy, financials, industrials, real estate and consumer discretionary sectors worst hit.

Pharmaceuticals bucked the selloff, though, with vaccine makers Moderna (+20.5%) and Pfizer (+6%) seeing strong gains.

“It is déjà vu all over again for like the eighth time,” said Keith Buchanan, senior portfolio manager at Global Investments in Atlanta (via Reuters):

“What we understand about this variant could accelerate over the weekend, if there is more concerning news than good news, a lot of people don’t want to be holding risk assets on Monday morning, or are afraid of what that could look like Monday morning.”

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%).

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.

The New York stock market is falling sharply at the start of trading, amid fears over the new Covid-19 variant.

The S&P 500 index, which covers a broad range of the market, has dropped by 1.25% at the open - down 60 points at 4,641 points.

Energy, financial and industrial stocks are leading the selloff, along with travel firms, in what will be a shortened session for the Thanksgiving break.

The Dow Jones industrial average, which contains 30 large US firms, is down 1.85%, losing 660 points to 35,143 points.

But the tech-focused Nasdaq Composite index is holding up better, down 0.75%.

Craig Erlam, senior market analyst at OANDA, says:

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.

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 swiss franc getting plenty of love.

Global oil prices have plunged below $80 a barrel after “the most worrying” new variant of Covid-19 was identified in South Africa, raising fears in the market of renewed global travel restrictions that could derail the oil market’s recovery.

The price of Brent crude had tumbled by more than $4 (£2.99) a barrel, or 4.9%, to $78.15 a barrel by mid-morning on Friday after countries across Europe and Asia brought in immediate travel restrictions to guard against the spread of the B.1.1.529 variant identified in several African countries. The US oil price per barrel plunged by more than $5 to just over $73.

The new variant has multiple mutations to its spike protein that it is feared could enable it to evade the immune response induced by existing vaccines.

After its identification earlier this week, the UK government announced on Thursday night it was putting six southern African countries back on England’s travel red list, with British travellers returning from those locations from 4am on Sunday having to quarantine. Meanwhile, the European Commission president, Ursula von der Leyen, said the EU also aimed to halt air travel from the region.

B.1.1.529 threatens to reverse the oil market’s gains in recent months as travel and economic activity had begun to recover from a series of coronavirus lockdowns around the world.

The sudden drop in global oil prices also wiped value from the UK’s largest listed oil and gas companies. The oil giant Royal Dutch Shell is down 4.8% this afternoon, with BP tumbling 6.5%.

More here:

The Bank of England’s new chief economist has cited Chinese communist leader Deng Xiaoping’s economic reforms today, as he explains why the BoE should take a cautious approach to monetary policy.

Huw Pill told the CBI that if the UK jobs market remains strong, interest rates will need to gradually increase in the coming months, to make sure inflation comes back down from current high levels.

In his first speech as the Bank’s chief economist, Pill says:

At 4.2% in October, UK CPI inflation is well above its 2% target. This is clearly uncomfortable for a monetary policy maker with the objective of price stability.

In my view, the ground has now been prepared for policy action

But as the economic picture is still uncertain, the BoE can’t give precise guarantees on what will happen to interest rates, especially further into the future than the coming months [investors were surprised when the Bank didn’t raise interest rates this month]

The main message, Pill says, is that the Bank should be cautious in offering guidance on the path of interest rates at those longer horizons, as policymakers weigh up the risks to growth and inflation.

He concludes:

Deng Xiaoping famously characterised China’s economic liberalisation as an attempt to ‘cross the river by feeling the stones’. That metaphor feels appropriate to describe the coming challenges for UK monetary policy.

We know where we are headed: towards the 2% inflation target.

We know that the passage there be challenging, with strong currents and hidden undertows all threatening our progress.

But rather than identifying a point mid-river that we forge towards with no regard for the fast-moving eddies encountered along the way, it is better to adopt a step-by-step approach, where we ensure our feet are securely anchored on the slippery river bed, before inching further forward.

Reacting to the ebbs and flows of the current. Showing caution rather than bravado. Learning by doing. These are the secrets to safely reaching the other side.

That is the task that lies ahead for UK monetary policy.

A quick recap.

Britain’s FTSE 100 is on track for its worst day this year, as the emergence of the B.1.1.529 variant sends markets sliding around the globe.

The blue-chip index of London’s largest listed companies is down 190 points, or 2.6%, at 7121 points, having hit a six-week low this morning.

Travel, hospitality, oil and financial stocks are among the big fallers, on concerns that B.1.1.529 could lead to widespread new pandemic restrictions and slow the economic recovery.

Airline group IAG are currently down 14%, with jet engine maker and servicer Rolls-Royce off 10%. Conference organiser Informa (-7.5%) and hotel groups Whitbread and InterContinental (both -6.3%) are also in the top FTSE 100 fallers.

Other travel companies have been hit too, with cruise operator Carnival currently down 12.7%, holiday firm TUI off 10% and easyJet down 9.9%.

The selloff came after the UK imposed travel restrictions on a group of southern African nations as a surge in cases of the highly mutated coronavirus variant.

South Africa’s rand hit a one-year low.

European markets are also sliding, with France’s CAC shedding 3.6% and Germany’s DAX down 2.9%.

New York will join the selloff in a couple of hours, with the Dow Jones industrial average down over 2% or 800 points in pre-market trading.

Oil has slumped to a two-month low, with Brent crude off 6% at $77.35 per barrel, on concerns that the global economic recovery could be hit. Industrial metal prices have also weakened.

Wall Street’s fear index, the VIX, has surged, while cryptocurrencies have also tumbled as investors ditch riskier assets. Bitcoin is down almost 9% today, putting it into a bear market (more than 20% off its recent high).

Joshua Raymond, director at financial brokerage XTB, says:

“The new Covid variant has created uncertainty in the markets today, with investor appetite shying away from risk. As a result, we have seen European stocks start the day in sell off mode with the FTSE 100 and DAX30 both falling 3%.

The main worry right now is the potential for this variant to evade the vaccines. This is the immediate concern amongst investors right now and their first move as a result has been portfolio protection.

If this variant proves more potent and threatens the success of the vaccine rollout, its hard to see a bigger threat to market stability right now.”

Wall Street’s ‘fear index’, the VIX, has jumped by 40% this morning.

The Vix index, which measures the likely volatility in US stocks over the next month, rose by 8 points on Friday to 26.6, the biggest increase since early 2021.

That shows investors are worried, as they sell riskier assets such as shares and race into perceived ‘haven’ assets such as government bonds.

Wall Street was closed yesterday for Thanksgiving, but opens at 2.30pm UK time (9.30am New York) for a half-day session.

The Dow Jones industrial average is currently on track to tumble 800 points, or over 2%.

Shares in travel and aviation businesses, including the British Airways owner, IAG, easyJet and the aero engine maker Rolls-Royce, plummeted on Friday over fears that a new coronavirus variant described as potentially the worst so far identified could lead to a new wave of global pandemic restrictions.

The emergence of the new variant, which was identified on Tuesday and is feared to be more transmissible and poses a threat to current vaccines, prompted the government to put six southern African countries back on England’s travel red list on Thursday night.

Flights from South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini are to be suspended from midday on Friday. Officials are also reviewing a number of travel measures, including whether there should be a limited reintroduction of the use of PCR tests for arrivals.

The news prompted a sharp sell-off of travel stocks on Friday, with IAG, which also owns the airline Iberia, tumbling as much as 14% in early trading.

IAG was the biggest faller among FTSE 100 stocks alongside Rolls-Royce, which receives revenues based on the number of hours flown by aircraft that use its engines, which was down about 12%. Intercontinental Hotels and Whitbread, the owner of the Premier Inn chain, fell 7%.

The FTSE 100 tumbled by 3% to its lowest level in six weeks on Friday morning as markets across Europe and Asia-Pacific countries were hit by a wave of selling.

Here’s the full story:

After two hours of jittery trading, the UK’s stock market is on track for its biggest fall this year.

The FTSE 100 index is down 204 points, or 2.8%, at 7105 points - slightly above its earlier lows.

That would be the FTSE 100’s worst one-day percentage drop since September 2020, with travel, hospitality, oil companies and banks all still sharply lower.

Russ Mould, investment director at AJ Bell, sums up the situation:

“The drop in the oil price is the market’s way of saying it is worried about a reduction in economic activity, something which also explains the slump in metal prices.

“Markets are clearly speculating that a rapid spread of a more brutal Covid strain could once again derail the global economy. Banking stocks were also weak as they are closely tied to economic activity.

“Headlines calling it the ‘worst ever variant’ have caused investors to panic and dump shares in travel-related stocks for fear that we’re going to see tough travel restrictions once again

“This is the worst possible news for airline operators as they were just starting to see a pick-up in trading, helped by people becoming more comfortable about travelling on a plane and routes like US/UK reopening.

Travel stocks are tumbling in early trading in the City, as the B.1.1.529 variant rattle markets.

IAG, which owns British Airways, fell 20% at the start of trading to their lowest level since November 2020. It’s recovered slightly, but still down 10.5%.

Rolls-Royce, which makes and services jet engines, is currently the top FTSE 100 faller, down 12%, after England imposed travel restrictions from South Africa and five neighbouring countries.

Hotel operators are sliding, with Intercontinental Hotels Group and Whitbread (which owns Premier Inns) both down over 8%. Catering group Compass has lost 7%.

On the smaller FTSE 250 index, budget easyJet has fallen by 11.5%, and cruise operator Carnival is down 15%. Holiday operator TUI has shed 13%.

SSP Group, which operates Upper Crust and Caffè Ritazza outlets at travel hubs, are down 14%.

Britain’s blue-chip FTSE 100 index has tumbled at the start of trading.

Concerns over the B.1.1.529 variant are hitting travel stocks, hospitality firms, oil companies and banks hard.

The FTSE 100 index has plunged by 243 points, or 3.3%, to 7066 points, its lowest point in six weeks, in a wave of selling.

Concerns that the B.1.1.529 variant could hit the global recovery is hammering the oil price.

Brent crude has dropped over 3% to $79.37 per barrel, while US crude has slumped by around 4% to $75.25 per barrel.

Jeffrey Halley, a senior analyst at brokerage OANDA, said the latest variant has sent “a wave of selling” through energy markets, on fears that mass social restrictions could be reimposed:

All we know so far is the B.1.1.529 is heavily mutated but markets are taking no chances, equities are falling, haven currencies such as the US dollar, Japanese Yen and Swiss Franc are rallying, commodity currencies such as the Canadian dollar, Australian dollar and New Zealand dollar are being sold, US 10-year bond yields have moved sharply lower, and oil has slumped.

South Africa’s rand has dropped more than 1.5% today, to a one-year low.

Concerns over the B.1.1.529 variant pushed the rand to 16.2 against the US dollar, after England introduced travel restrictions on six southern African countries.

The risk-sensitive Australian and New Zealand dollars each fell to three-month troughs, as Reuters reports:

“Markets are anticipating the risk here of another global wave of infections if vaccines are ineffective,” said Moh Siong Sim, a currency analyst at the Bank of Singapore.

“Reopening hopes could be dashed.”

Selling pressure comes against an already growing backdrop of concern about COVID-19 outbreaks driving restrictions on movement and activity in Europe and beyond.

More here.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Financial markets have been rattled by the emergence of the worst Covid-19 variant yet identified.

Stocks have fallen sharply in Asia-Pacific markets, the oil price has dropped, and European markets are expected to open sharply lower too.

The variant, called B.1.1.529, contains an “extremely high number” of mutations, which could help it evade the body’s immune response, scientists have said.

Those mutations mean that its spike protein looks different from the version that vaccines were designed to target.

Last night, England imposed travel restrictions on six Southern African countries including South Africa, after data presented by South African scientists revealed that the variant also appears to be more transmissible and is already present in provinces throughout the country.

South Africa, Namibia, Lesotho, Botswana, Eswatini and Zimbabwe have all been placed on England’s travel red list.

Two cases of B.1.1.529 has also been detected in Hong Kong.

The news has sparked a sharp selloff in the markets. Asia-Pacific shares have suffered their biggest losses since August, with MSCI’s index of Asia shares outside Japan sliding 2%.

Japan’s Nikkei is down 2.5%, with travel stocks among the big fallers. Japan Airlines has tumbled by 6.5%.

Hong Kong’s Hang Seng index has dropped 2.4%, as concerns that the B.1.1.529 variant could worsen the pandemic sent investors scurrying toward the safety of bonds, the yen and the dollar.

Michael Hewson, chief market analyst at CMC Markets, says the emergence of B.1.1.529 has triggered “a huge sell off” in Asia-Pacific markets.

This variant which, it is understood, contains up to 30 identified mutations, has prompted WHO officials to call an emergency meeting to discuss what it means for vaccine efficacy as well as other treatments. The new strain has also prompted the UK government to implement flight bans from six African countries over concern as to what this might mean for infection rates, and other ripple out effects.

For the moment it is understood that the number of cases is small, but due to the thin liquidity levels in Asia trading as a consequence of the US holiday the reaction does appear to be outsized, with a surge into bonds, sending yields plunging, and gold higher.

Britain’s FTSE 100 index of blue-chip shares is on track to tumble around 2% at the open, with losses seen across Europe.

The agenda

• 7.45am GMT: French consumer confidence for November
• 9am GMT: Italian consumer confidence for November