Stock markets have fallen across the world amid deepening pessimism over a rise in Covid-19 infections, with £44bn wiped off the value of the FTSE 100 index of the UK’s leading companies on what some have called “freedom day” from pandemic restrictions in England. The prospect of slowing global growth resulted in most stock markets across Europe experiencing significant falls, after a slide in Asia overnight that came when Indonesia reported an increase in cases and some athletes tested positive at Tokyo’s Olympic village, with the Games due to open on Friday. In the UK the FTSE 100 closed down 2.4% at 6,844 points, its biggest one-day fall since 11 May and its lowest close since early April. In the process, £44bn was wiped off the value of FTSE 100 companies, with ITV the biggest faller, down 6.6% on fears that advertising revenues will be hit by any stalling in the UK’s economic recovery. The widespread sell-off of shares by investors also affected travel and oil companies, banks and retailers. Shares in BP and Lloyds Banking Group ended the day down almost 5%, while the Primark owner, Associated British Foods, fell by 4% and Next by 3.4%. Travel firms were also among the biggest fallers on London stock markets, as uncertainty about the spread of the virus fuelled concerns about further clampdowns by the Johnson administration on foreign travel arrangements. The British Airways owner, IAG, closed down more than 5% and the aeroplane engine-maker Rolls-Royce lost 6.5% of its market value. In the FTSE 250, easyJet declined by 6.5% and the tour operator Tui was down almost 4%. The pan-European Stoxx 600 index fell 2.3%, its lowest close in two months, with Germany’s Dax and France’s Cac bourses down 2.5%. In the US, Wall Street investors joined the stock market sell-off, with the Dow Jones industrial average down more than 2% by lunchtime in New York. Fears that a relaxation of lockdown rules by Boris Johnson’s government would aid the spread of new variants in the UK also weighed heavily on the value of the pound, which lost ground against the euro and the dollar. Sterling dropped to $1.37, its lowest since April, and was down about 0.6% against the euro to €1.16. Analysts said few markets were immune to the sense of trepidation that accompanied warnings from health professionals that the virus could still cause a rise in hospitalisations and harm to younger people despite higher vaccination rates. Susannah Streeter, a senior investment analyst at the stockbroker Hargreaves Lansdown, said: “With some scientists warning that infections could reach 200,000 a day by September, there is now a feeling that the UK could be staring at a fresh autumn lockdown.” Russ Mould, the investment director at the stockbroker AJ Bell, said: “Covid is spreading fast again and the airlines, restaurants and leisure companies may not get the strong summer trading they’ve long hoped for. “The big concern for the market is whether we are going to see a slowdown in the global economic recovery, and this could be the overriding force which results in a bad period for equities in the weeks ahead,” he said. Many investors took their money out of shares and sought safe haven assets such as government bonds, pushing some yields – the effective interest rate on a bond – to lows not seen since February. The 10-year US Treasury yield hit a five-month low of 1.26% and the German 10-year yield fell to minus 0.37%, the lowest since early March. Brent crude, the international oil benchmark, dropped 4% to $70.63 (£52.21) a barrel as concerns about the likely path of global economic growth followed earlier falls caused by Opec, the cartel of oil-producing countries, and its allies reaching a deal to raise production to counter increasing prices. There was a knock-on effect on oil majors such as BP, Royal Dutch Shell and Total, which suffered share price falls between 3% and 3.8%. Lavanya Venkateswaran, an analyst at Mizuho Bank in Singapore, said the 10-strong Asean economic bloc covering Thailand, Singapore and the Philippines was on the brink of a resurgence of the virus after recent localised outbreaks. “The more transmissible Delta variant is delaying the recovery for the Asean economies and pushing them further into the doldrums,” she said. Joshua Mahony, a senior market analyst at IG in London, said the rise in infections in the UK was a setback to travel firms and hospitality businesses, with their shares being slashed in value. “While restrictions have been eased, the fact that Covid is so rife within the country does breed the kind of caution that could inhibit the exact economic activity encouraged by the government,” he said.