European markets closed much lower on Monday as investors watched for a new, rapidly spreading variant of the coronavirus that has shut down much of the UK
The pan-European Stoxx 600 provisionally closed 2.3% lower, with banks falling 3.6% to lead losses. All sectors and major stock markets slipped into negative territory.
Traders are nervously watching the new Covid mutation in the UK, which has resulted in a difficult lockdown in London and other parts of south-east England and a turnaround in the household mix over the Christmas holidays.
The variant is believed to be up to 70% more transmissible than the original strain of the disease. The World Health Organization said it had so far been identified in Denmark, the Netherlands and Australia.
This has led several countries in Europe and elsewhere to block travel from Great Britain. France, Germany, Italy, Ireland and the Netherlands have all banned flights from the UK, as have Canada and Israel.
The situation could further complicate the Brexit negotiations. Britain and the European Union remain deadlocked on post-Brexit trade relations as December 31 approaches, with disputes over issues such as fisheries plaguing the negotiations.
The British pound fell sharply against the dollar, falling 1.32% to around $ 1.3345.
In Asia, shares traded in a mixed fashion, as the coronavirus situation in parts of North Asia – like Japan and South Korea – remains dire.
Meanwhile, on Wall Street, stocks fell as enthusiasm for a coronavirus stimulus deal was overwhelmed by concerns over the UK’s new strain of Covid.
The Dow Jones Industrial Average slipped 260 points. The S&P 500 lost 1.6% and the Nasdaq Composite fell 1.5%.
Cruise operator Carnival lost more than 5%, while the Trainline reservation service lost more than 10%.
Oil companies BP and Shell also fell around 5% due to the market shutdown.