Shares tumbled on Wall Street on Friday, as they reopened after Thanksgiving, while European stocks saw their biggest sell-off in 17 months and oil prices plunged by $10 per barrel as fears over a new coronavirus variant sent investors scurrying to safe-haven assets.

The World Health Organization (WHO) on Friday designated Omicron, a new coronavirus variant detected in South Africa with a large number of mutations as being "of concern," the fifth variant to be given the designation.

Unofficially, the Dow Jones Industrial Average closed down 2.53 percent at 34,899.34 in its largest percentage drop in more than a year. The S&P 500 lost 2.27 percent, its worst one-day drop since February 25, and the Nasdaq Composite dropped 2.23 percent, the biggest one-day route in two months.

U.S. markets closed early on Friday, after being shut all day on Thursday, for the Thanksgiving holiday.

The benchmark STOXX 600 index ended 3.7 percent lower on the day, leaving it down 4.5 percent for the week. The volatility gauge for the main stock market hit its highest in nearly ten months.

Companies that had benefited from an easing of COVID-related restrictions this year, including AMC Entertainment, plane engine maker Rolls Royce, easyJet, United Airlines and Carnival Corp all fell.

Retailers dropped as Black Friday (the start of the holiday shopping season) kicked off as the new variant fueled concerns about low store traffic and inventory issues.

In Europe, the travel and leisure index plummeted 8.8 percent in its worst day since the COVID-19 shock sell-off in March 2020.

"Bottom line is this is showing that COVID is still the investor narrative, a lot of today's movement is driven by the South African variant," said Greg Bassuk, chief executive officer of AXS Investments in Port Chester, New York.

"We have been talking about four or five factors that have been driving the last couple of months' activity – inflation fears, some economic data, Fed policy – but what we have seen over the last year is that big developments with respect to COVID really have ended up eclipsing some of those other factors by a substantial degree and that is what is driving today's market activity."

Britain said, the new variant was the most significant variant to date and was one of several countries to impose travel restrictions on southern Africa.

(With input from Reuters)