European shares turned sharply red at the open on Friday as fears of the new Covid variant from South Africa battered travel stocks with investors fearing another lockdown and global travel restrictions.
The pan-European Stoxx 600 was down more than 3% in early trade. Investors took flight after the variant, known as B.1.1.529, was said to have the ability to mutate quickly and evade immunity.
Countries across the Continent were already on high alert due to a spike in Covid cases, with Austria going into full lockdown this week and Germany saying it could follow suit.
The news hammered the travel sector, which had been hoping for a long-awaited boost during the Christmas period after a year of restrictions.
Shares in IAG, which owns British Airways, Aer Lingus and Iberia, plunged 14%, budget carrier easyJet was down 12% and cruise line operator Carnival down more than 14%. Lufthansa, Wizz Air, Ryanair and holiday firm TUI were also slammed.
The news hit plane maker Airbus, and aircraft engine manufacturer Rolls-Royce, both off 12%.
Travel-related retailers were also hit, with WH Smith off 12% and Dufry 11.57%.
Meanwhile, fast food and grocery delivery companies, which made sharp gains during previous lockdowns, were back in favour with HelloFresh, Just Eat Takeaway, Ocado, Deliveroo and Delivery Hero in favour.
