UPDATE 2-FTSE 100 suffers year's worst session on virus scare

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* BA owner sinks 10% after new travel restrictions

* Miners, oil stocks hit by a slump in commodity prices

* FTSE 100 down 3.7%, FTSE 250 off 3.0%
(Updates to close)

By Bansari Mayur Kamdar

Nov 26 (Reuters) - The UK's blue-chip share index slumped on
Friday, suffering its biggest drop in more than a year as fears
over a newly detected and possibly vaccine-resistant coronavirus
variant gripped stock markets around the world.

The FTSE 100 index closed down 3.7% at its lowest in
more than seven weeks, with commodity, travel, and banking
stocks leading the sell-off.

Britain said the virus variant spreading in South Africa was
considered by scientists to be the most significant one found
yet and it needed to ascertain whether it rendered vaccines
ineffective.

Tourism group TUI fell almost 10% while airline
companies like Wizz Air, easyJet and British
Airways-owner IAG lost around 15% after UK authorities
imposed travel restrictions from South Africa and five
neighbouring countries.

"We don't know so much about this variant yet but if it's
serious, it could change the macro scenarios altogether," said
Roland Kaloyan, head of European equity strategy at Societe
Generale.

"The Bank of England will not hike rates in a period where
we can enter lockdown and put serious burden on the economy."

Supply-chain worries and inflationary pressures have kept
the FTSE 100 under pressure, with the blue-chip index lagging
its European peers so far this year.

Shares of major UK lenders HSBC, Lloyds Bank
and Barclays all fell almost 5% as investors
scaled back expectations for an interest rate hike in December.

"Over the last month, the banking sector has benefited from
a steeper yield curve but with the news today we see a lower
bond yield and that's also not quite positive for the long
term," said Kaloyan.

Energy and mining stocks fell
6.3% and 4.4%, respectively, tracking a slump in commodity
prices on fresh economic slowdown fears.

The domestically focussed mid-cap index dropped
3.0%, faring a bit better than its blue-chip counterpart as
online trading platform Plus500 and CMC Markets
gained ground.
(Reporting by Bansari Mayur Kamdar in Bengaluru; editing by
Uttaresh.V and Subhranshu Sahu and Kirsten Donovan)