U.K. travel and leisure stocks plunged on Friday after the discovery of a new coronavirus variant to the worst levels since Pfizer first announced the results of a vaccine study.
The FTSE 350 travel and leisure sector dropped 6% to 522.14, which is the lowest since Nov. 9, 2020. It’s still 8% above the pre-vaccine announcement level.
Airport restaurant operator SSP Group
SSPG,
and British Airways owner International Airlines Group
IAG,
each dropped 14%. Domino’s Pizza Group
DOM,
which operates U.K. franchises of the pizza company, was the only constituent of that index rising, edging up 1%.
The reaction was severe considering how little is known about the B.1.1.529 variant, that’s believed to be driving a spike of cases in South Africa and led the U.K. to order a halt of passenger traffic from Southern Africa. Africa and the Middle East represented 3% of IAG’s passenger traffic in the third quarter, and other airlines that have been slammed such as Wizz Air
WIZZ,
don’t fly to Africa at all.
“The immediate way the tough restrictions were imposed was a reminder of just how tied companies’ fortunes are to snap government decisions and the latest twists in the trajectory of the virus,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
The selling wasn’t limited to travel stocks, with oil major BP
BP,
Asia-focused bank Standard Chartered
STAN,
and mining conglomerate Glencore
GLEN,
each reeling by about 6%.
The FTSE 100
UKX,
fell over 3% in midday action.
This post was originally published on Market Watch
