Market chaos as traders panic over new Covid variant lockdown fears

Omicron variant: Scientist warns how infectious strain may be

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The global announcement of the emergent Omicron variant on Friday has also caused oil to plunge as traders panic. The shock of the new variant saw the FTSE 100 suffer one of its worst falls in nearly 18 months. Traders have panicked because the new variant of Covid would trigger a return to lockdowns and cause serious disruption to the global recovery.

The resultant sharp sell-off caused Britain’s blue chip index dropped 3.6 percent.

This was the greatest drop in the index in since June last year.

The panic spread to Europe, German markets closed down 4.2 percent and France fell 4.8 percent.

The S&P 500, which tracks the performance of 500 large companies, tumbled 2.3 percent in its biggest drop since February.

Oil plunged amid concerns about a collapse in demand triggered by international air travel curbs and extended lockdown measures.

Brent Crude suffered a 10 percent drop, its biggest decline since April last year.

The news comes after two cases of the new Omicron variant of the coronavirus have now been detected in Britain.

On Saturday Health Secretary Sajid Javid said: “Late last night I was contacted by the UK Health Security Agency.

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“I was informed that they have detected two cases of this new variant, Omicron, in the United Kingdom.

“One in Chelmsford, the other in Nottingham.”

Omicron was detected for the first time earlier this week in South Africa.

The Cboe Vix index, also known as Wall Street’s ‘fear gauge’ posted its biggest one-day jump since January.

Yields on US 10-year Treasuries, a cornerstone of the global financial system, fell 0.1 percentage points to 1.53pc.

This was caused by investors racing to safe havens.

The UK’s 10-year gilt yields also fell 0.15 percentage points.

The chances of the Bank of England increasing interest rates this month have fallen, with the market pricing in a decreased 70 percent chance of a rate rise.

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