Travel sector stocks rocked by escalating terror fears

LONDON: Heightened terror fears battered tourism sector stocks on Tuesday (Nov 24), with airlines especially affected after Washington issued a travel warning and Turkey shot down a Russian warplane.

Shares in airlines as well as in travel and hotel groups slid after the United States issued a worldwide travel alert for its citizens on Monday.

Russia meanwhile confirmed that a warplane shot down by Turkey on the Syrian border was one of its fighter jets but insisted the plane had not violated Turkish airspace.

In Britain, budget airline Easyjet and British Airways announced it had cancelled all flights to and from the Egyptian resort of Sharm el-Sheikh until next year over security concerns raised by the downing of a Russian airliner in Egypt last month. Russia last week said the plane was blown up in a "terrorist attack."

Brussels will meanwhile stay at the highest security threat level for another week over fears of an imminent terror attack, the Belgian government said.

"The heightened geopolitical threat from the Russian jet being downed by Turkey, while Brussels remains in lockdown, is sending people into safe havens like the yen and gold and out of travel-sensitive stocks," said Jasper Lawler, an analyst with traders CMC Markets.

"The rebound in the oil price is also a negative for fuel prices for airlines," he told AFP.

London's benchmark FTSE 100 index closed down 0.45 per cent, while the eurozone's main markets Frankfurt's DAX 30 and the CAC 40 in Paris both dropped nearly 1.5 per cent compared with Monday's close.

In New York, US shares were lower on Tuesday following Europe's stock slide on the downing of a Russian jet by Turkish forces.

The geopolitical tensions overshadowed the US Commerce Department report that the world's biggest economy grew at a stronger pace than first thought, by 2.1 per cent, in the third quarter.

In foreign exchange, the euro stood at US$1.0639 as it extended its recovery from seven-month lows of under US$1.06 on Monday. Gold meanwhile rose 0.67 per cent to US$1,076 per ounce.

On Tuesday, authorities in Belgium and France were hunting for Belgian-born Salah Abdeslam, a key suspect in the Paris attacks on Nov 13, when gunmen and suicide bombers killed 130 people.

Meanwhile "the shooting down of a Russian jet by Turkish forces, appears to have spooked the markets, with the European indices sharply widening their losses", noted Connor Campbell, financial analyst at Spreadex.

The incident is the first time a Russian military plane has been downed since Moscow began a bombing campaign on September 30 at the request of its long-standing ally Syrian President Bashar al-Assad.

Tuesday's developments sent travel sector shares sliding. In London, Easyjet slumped 3.34 per cent and British Airways' parent IAG lost 3.53 per cent.

Elsewhere on Tuesday, shares in German airline Lufthansa shed 3.98 per cent and in Paris, French hotels group Accor sank by 4,86 per cent in value compared with Monday's close.

Source: Travel sector stocks rocked by escalating terror fears