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Stocks have crashed this morning on fears that a new Covid variant could lead to new restrictions on leisure and travel to mitigate its spread. 

The wider FTSE 100 has plunged 3.1% back to a six week low of 7,073.1pts in early trading on concerns over a new Covid variant in South Africa after the UK placed six countries on its red list to restrict travel. 

Some of the biggest trading casualties this morning have been those stocks which rely on consumer mobility, which were hit hardest during the early wave of Covid lockdowns in 2020. 

Travel food specialist SSP Group, which last night announced Greencore’s current CEO Patrick Coveney has agreed to join as its new CEO in March 2022, has plunged 11.4% back to 227, hitting its lowest level for more than a year. 

Greencore itself has dropped 7.8% to 124.8p given its reliance on the food to go market as the UK’s biggest sandwich maker. 

Other stocks suffering so far this morning are travel retailer WH Smith, down 11.1% to 1,360.3p, FTSE 100 caterer Compass Group, down 6.3% to 1,484.5p, alcoholic drinks producer and distributer C&C Group, down 6.1% to 231.8p, Primark owner Associated British Foods, down 5.4% to 1,838p and high street bakery chain Greggs, down 4% to 2932.3p. 

Pub groups are also down sharply with Marston’s falling 8.2% to 69.9p, Mitchells & Butlers down 5.5% to 230.9p, Wetherspoons down 4.6% to 884p, Restaurant Group shares down 7.9% to 78.3p and City pub group down 6.3% to 96p. 

Conversely, those online business which saw sales boom during earlier Covid lockdowns have seen share price rises this morning. 

Just Eat is up 2.8% to 5,326p, Deliveroo up 2.5% to 1,793.5p and Ocado is up 2.5% to 1,793.5p. 

Mainstream supermarkets players are down less than the wider market, with Tesco and Sainsbury’s both down 1% to 277.5p and 292.4p respectively. 

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown commented: ““Fear has gripped the financial markets with the travel industry flying into another violent storm, after the discovery of a new Covid strain which could be far more contagious and may render vaccines less effective.” 

“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.” 

Morning update 

The major grocery news of the day broke last night with the post-close market announcement that Greencore CEO Patrick Coveney is to leave the food-to-go specialist to take the reins at SSP Group 

Today, away from the carnage on the markets, Diageo has announced that it is commencing the next tranche of its previously announced return of capital programme of up to £4.5bn to shareholders by 30 June 2024.  

The latest tranche will commence on 26 November 2021 and end no later than 4 March 2022, with the company buying back shares up to the value of £0.55bn. 

The first phase of the programme was completed on 31 January 2020, which saw Diageo repurchase £1.25bn of shares, while the second phase was initiated in May 2021 and completed on 12 November to repurchase £0.45bn of shares. 

The purpose of the repurchases is to reduce the share capital of Diageo and all shares repurchased under this agreement will be cancelled. 

Yesterday in the City 

The FTSE 100 closed up for the fourth consecutive day, rising 0.3% to close at 7,310.3pts yesterday.  

Risers included Bakkavor, up 4.3% to 126.2p, Britvic, up 3.3% to 930p, Compass Group, up 3.2% to 1,584p, Hotel Chocolat, up 2.8% to 518p, FeverTree, up 2.3% to 2,670p, AG Barr, up 1.8% to 474.5p and Greencore, up 1.8% to 135.3p. 

PayPoint fell back 4.3% to 622p after publishing its interim results yesterday. 

Other fallers included Kerry Group, down 1% to €109.80, PZ Cussons, down 1.3% to 198.8p, Ocado, down 1.4% to 1,749p and Glanbia, down 3.9% to €12.49.