In total more than £85bn was was wiped off two London stock indexes at the close of the day as investors got the jitters over the new variant.
The FTSE 100 index closed the day down by 3.6% which wiped £72.1bn off the value of shares as the 266 point drop is the worst performance since the UK entered its first lockdown in March 2020.
Whilst the FTSE 250 lost 3.2% of its value, wiping £13.5bn off shares. The collapse was led by airlines and Rolls-Royce who make engines for planes.
“Forget Black Friday; today has been renamed Red Friday after the colour of share price screens as stocks slump globally on fears over a new Covid strain,” said Russ Mould, investment director at AJ Bell.
“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.
He added, “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.”