World stocks and oil prices sank Monday as the spreading Delta virus variant fuelled fears it could undermine the economic recovery, and the OPEC+ alliance agreed to hike output.

Safe haven assets were the order of the day amid a generalised 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, and in New York the Dow Jones index was off by 2.1 percent in midday exchanges.

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 criticised 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."

- 'As good as it gets'? - In Asia, Hong Kong was hammered after the United States warned businesses about the "growing risks" of operating in the city owing to China's tightening grip, which has raised concerns about its future as a financial hub.

With stocks in general at or near record highs, Moya said that "equities were ripe for a pullback given Wall Street was in agreement that this is 'as good as it gets' for peak earnings, economic growth, monetary stimulus, and shortly fiscal support."

 
- Key figures around 1600 GMT - New York - Dow: DOWN 2.1 percent at 33,976.94 points

EURO STOXX 50: DOWN 2.7 percent at 3,928.53

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)

Brent North Sea crude: DOWN 5.9 percent at $69.28 per barrel

West Texas Intermediate: DOWN 6.6 percent at $67.06 per barrel

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)

Euro/dollar: DOWN at $1.1805 from $1.1806 at 2100 GMT Friday

Pound/dollar: DOWN at $1.3690 from $1.3767

Euro/pound: UP at 86.24 from 85.76 pence

Dollar/yen: DOWN at 109.47 from 110.07 yen