Monday 26 August 2019

Travel shares lead Europe sell-off

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

Colm Kelpie

Bearish sentiment engulfed Europe's stocks for a second day after Turkey's military shot down a Russian jet and the US issued a global terror alert.

The Stoxx Europe 600 Index fell the most in almost two weeks, with 510 of its shares dropping. The downing of the aircraft took place as investors started to question a recent rebound in equities amid a slump in commodities and potential US interest-rate increase.

By the close in Dublin, the ISEQ Overall Index was down 1.2pc, or 80.76 points, to end the trading session at 6,646.12.

The leaders on the Dublin market included insurance group FBD, which rose 1.4pc to €6.80, while Glanbia increased 0.3pc to €17.22.

On the other side of the board, the laggards included building materials group CRH, which fell 2pc to €26.86, while recruitment group CPL Resources dropped 2.7pc to €6.42.

The Stoxx 600 slid 1.2pc at the close of trading in London, paring a drop of as much as 2pc. "You can see sentiment heading towards a risk-off type attitude," said Jasper Lawler, a London-based market analyst at CMC Markets.

"Perhaps we were looking for some reasons for a pullback and as that happened concerns have picked up over the general state of security. The whole business with the jet has fuelled the uncertainty."

Russian President Vladimir Putin accused Turkey of being accomplices of terrorism for shooting down the warplane, while Turkey said the pilots ignored repeated warnings that it was violating the nation's airspace.

Hotel operator Accor, Air France-KLM Group and Deutsche Lufthansa all dropped more than 3.8pc.

Bearish sentiment is taking over after the benchmark gauge for European equities pulled off a 13pc rebound from its low in September to a three-month high at the end of last week.

Additional reporting by Bloomberg

Irish Independent

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