London stocks sink as new coronavirus strain shuts UK

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* FTSE 100 down 2.1%, FTSE 250 off 2.8%

Dec 21 (Reuters) - London’s blue-chips slumped on Monday to a near three-week low as a fast-spreading new coronavirus strain prompted tougher restrictions, while a fresh ban on UK travellers hammered airline and oil stocks.

The FTSE 100 fell 2.1% to touch its lowest since Dec. 2, though a near 2% plunge in the pound capped losses on the exporter-heavy index.

BP and Royal Dutch Shell were the biggest drags on the index, shedding almost 5% each as crude prices slumped on worries about fuel demand.

British Airways-owner IAG, Wizz Air Holdings and easyJet fell between 11% and 16%, while InterContinental Hotels Group dropped 4% as many of Britain’s European neighbours imposed a ban on travel to the United Kingdom.

The domestically focused FTSE 250, considered a barometer for Brexit sentiment, shed 2.8% with no Brexit trade deal in sight.

Brexit-sensitive banking stocks such as Lloyds and Barclays tumbled over 5%. (Reporting by Shivani Kumaresan in Bengaluru; Editing by Subhranshu Sahu)