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Nov. 26, 2021, 6:50 a.m. EST

European stocks skid on discovery of new virus variant as airlines, banks reel

By Steve Goldstein

European stocks were on track to their worst single-day performance of the year, getting hammered after the discovery of a new more virulent strain of coronavirus.

The Stoxx Europe 600 (STOXX:XX:SXXP) dropped 2.3% to 470.52, after the discovery of what for now is being called the B.1.1.529 variant, that’s believed to be driving a spike of cases in South Africa. The World Health Organization is holding an emergency meeting and may call the new variant ‘Nu.’

The French CAC 40 (PAR:FR:PX1) dropped over 3%, as the German DAX (XEX:DX:DAX) and FTSE 100 (FTSE:UK:UKX) also slumped. U.S. stock futures (CBT:YM00) (CME:ES00) also were rocked.

“We think it’s too soon to quantify the likely impact of this new variant but markets have had a very strong run over the last 12 months, and so it is no surprise to see a reaction like this,” said Dan Boardman-Weston, chief investment officer at BRI Wealth Management.

Investors flocked to safer assets such as German bunds, U.S. Treasurys, and gold (NYM:GC00) , with the 10-year bund (XTUP:BX:TMBMKDE-10Y) falling 7 basis points to -0.32%.

Each of the major sector indexes were dropping, led by travel and leisure and banks. Cruise operator Carnival (LON:UK:CCL) lost 14%, and British Airways owner International Airlines Group (LON:UK:IAG) stumbled 13%. The European Union was moving to halt air traffic from South Africa , a step the U.K. has already taken.

Italian diagnostics kit maker DiaSorin (MIL:IT:DIA) and French lab instrument maker Sartorius Stedim Biotech (PAR:FR:DIM) were among the few advancers.

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