Fears that the rapidly spreading Delta variant of Covid-19 would hurt the global recovery caused stocks to fall on Thursday, with investors worried that economic growth could slow.

Shares fell sharply in London and other European exchanges, after losses in Asia-Pacific markets, amid fears that the economic rebound from the pandemic shock may have peaked and declined. signs of a slowdown in China.

The FTSE 100 index of blue-chip stocks in London fell 120 points, or 1.7%, to close at 7,030 points, its largest single-day decline in three weeks. Retailers, mining companies, home builders, hotel companies and financial stocks led the falls.

The European-wide Stoxx 600 recorded its biggest loss in two months, down 1.8%, with the French CAC index losing 2% in its biggest drop since the end of April.

The Spanish ibex fell 2.3% after the French government warned citizens against traveling to Spain or Portugal on vacation due to an increase in Covid-19 cases.

On Wall Street, the S&P 500 fell back from its last record, losing 0.85% as financials, mining, industrial and technology companies were hit. The Dow Jones Industrial Average and the Nasdaq Composite both fell more than 0.7%.

The Delta variant is already the dominant strain of Covid-19 in the United States, accounting for over 50% of all new cases. Medical experts fear that this more infectious variant poses a serious risk to Americans who are not vaccinated, which could lead to an upsurge in infections that would reverse the economic reopening.

Japan’s decision to hold the Tokyo Olympics without spectators under the Covid-19 state of emergency, following an increase in cases, has also deteriorated the mood in the markets.

“It appears that optimism about a strong global recovery has been replaced by slight fears that growth is approaching a peak and that central banks are slowly easing their emergency stimulus measures, ”said Fawad Razaqzada, analyst at Think Markets. “The increase in cases of the Delta variant of Covid-19 has weighed on the prospects for recovery, with Japan officially declaring a state of emergency for Tokyo just two weeks before the Olympics.”

Although economic growth has been rapid this year, there have been signs that the rebound may reach its peak. The U.S. service sector saw a slowdown last month, as Chinese factory growth hit its lowest level in four months, with outbreaks of Covid-19 in major ports disrupting trade.