World stocks and oil prices sank Monday as the spreading Delta variant of Covid-19 fueled fears of a faltering economic recovery, while the OPEC+ alliance agreed to hike output.
Safe haven assets such as US Treasury bonds were the order of the day amid a generalized sell-off of risky investments.
Oil prices plunged after OPEC+ agreed Sunday to pump an extra 400,000 barrels per-day each month from August to meet rising demand as economies reopen.
London stocks gave up 2.3 percent at the close after the UK government lifted England's daily pandemic curbs despite soaring infection rates.
In eurozone trade, Frankfurt slumped by 2.6 percent and Paris shed 2.5 percent. In New York, the Dow dove 2.1 percent in its worst session of 2021.
Europe mirrored sharp losses in Asia as investors dumped risky investments and fretted that runaway inflation could spark central bank interest rate hikes.
- 'Flight to safety' -
"Risk aversion is firmly in place as the Delta Covid variant spread is triggering a flight to safety," said Edward Moya, an analyst at the Oanda brokerage.
"Global investors are growing anxious and selling stocks, commodities, and even cryptocurrencies to buy US Treasuries," he added.
In England meanwhile, almost all Covid-19 restrictions were lifted, a move criticized by many health experts but hailed by media and supporters as "freedom day".
"Far from bringing an added dose of confidence to investors, 'Freedom Day' appears to be a setback," Hargreaves Lansdown analyst Susannah Streeter told AFP.
"The sharply rising Covid infection rates across the UK, and concerns about fresh easing of restrictions, is likely to be behind the drop."
The Delta variant has been in the headlines for weeks, but concerns on Wall Street grew after Los Angeles reimposed an indoor mask mandate over the weekend following a steady increase in Covid-19 infections and hospitalizations.
While the losses were fairly broad-based, travel equities were an especially weak area for stocks. Carnival and United Airlines both dropped more than five percent, while Marriott International lost 3.1 percent and Expedia declined 3.8 percent.
Monday's rout reflects "cumulative effect" of recent headlines, said Art Hogan, chief strategist at National Securities.
"The market is focused on the coronavirus restrictions and what it means for economic activity. There is very strong muscle memory on what that means."
- Key figures around 2050 GMT -
New York - Dow: DOWN 2.1 percent at 33,962.04 (close)
New York - S&P 500: DOWN 1.6 percent at 4,258.49 (close)
New York - Nasdaq: DOWN 1.1 percent at 14,274.98 (close)
London - FTSE 100: DOWN 2.3 percent at 6,844.39 (close)
Frankfurt - DAX 30: DOWN 2.6 percent at 15,133.20 (close)
Paris - CAC 40: DOWN 2.5 percent at 6,295.97 (close)
EURO STOXX 50: DOWN 2.7 percent at 3,928.53 (close)
Tokyo - Nikkei 225: DOWN 1.3 percent at 27,652.74 (close)
Hong Kong - Hang Seng Index: DOWN 1.8 percent at 27,489.78 (close)
Shanghai - Composite: FLAT at 3,539.12 (close)
Brent North Sea crude: DOWN 6.8 percent at $68.62 per barrel
West Texas Intermediate: DOWN 7.5 percent at $66.42 per barrel
Euro/dollar: DOWN at $1.1804 from $1.1806 at 2100 GMT Friday
Pound/dollar: DOWN at $1.3675 from $1.3767
Euro/pound: UP at 86.29 from 85.76 pence
Dollar/yen: DOWN at 109.46 from 110.07 yen