The pan-European STOXX 600 index fell 3.3 per cent by 0819 GMT, on course for its worst session in over a year, while UK’s FTSE 100 dropped 3.3 per cent. Germany’s DAX fell 3.4 per cent and France’s CAC 40 shed 4.3 per cent.
Little is known of the variant detected in South Africa, Botswana and Hong Kong, but scientists said it has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.
Cyclical-heavy European stock markets have already been under stress this week as a resurgence in COVID-19 cases prompted new restrictions in several countries.
Travel & leisure stocks plunged 6.5 per cent after Britain announced a temporary ban on flights from South Africa and several neighbouring countries from 1200 GMT on Friday.
Shares in British Airways owner IAG and easyJet fell over 12 per cent, while cruise operator Carnival and travel company TUI fell between 12 per cent and 15 per cent.
Oil & gas producers dropped 5.8 per cent, while miners tumbled 4.4 per cent as oil and metal prices lost ground as reports of the new virus variant fuelled economic slowdown worries.
Tracking falls in bond yields, the banking index dropped 4.4 per cent, while some stay-at-home stocks including Delivery Hero and Just Eat Takeaway.com rose between 3 per cent and 5 per cent.
New York’s S&P 500 futures dropped 2 per cent, with trading likely thinned by the U.S. Thanksgiving holiday on Thursday and a shortened trading session on Friday.
