European stocks dip after EgyptAir crash

Equity markets fell in Europe, weighed down by falls for travel sector stocks after an EgyptAir aircraft carrying 66 passengers and crew from Paris to Cairo disappeared.

Stocks around the world sold off. The dollar gained, pressuring oil prices, as increased expectations that the Federal Reserve could raise interest rates in the near term rippled through financial markets.

DUBLIN

The Iseq index finished down 0.5 per cent. Cement-maker

CRH

, the largest component of the index, bucked the trend, rising 0.8 per cent, amid expectation that US highway construction will accelerate, driving CRH’s revenues.

Bank of Ireland rose 2.1 per cent to 24 cent in line with upward momentum for European banks. There were gains also for Kingspan, which climbed 3.2 per cent to €24.61, and Ryanair, which nudged up 0.2 per cent to €13.18 despite falls for airlines across Europe. Dalata Hotel Group added 3.3 per cent to €4.64 on the latest upbeat assessment of revenues in the sector.

Food group Kerry fell 2.2 per cent to €78.88, Glanbia dropped 1.2 per cent to €15.90 and C&C finished down 1.1 per cent at €3.87. Paper and packaging company Smurfit Kappa was also among the fallers, dropping 1.5 per cent to €23.85.

LONDON

The FTSE 100 dropped 1.8 per cent after the disappearance of an EgyptAir flight and a drop in summer bookings for

Thomas Cook

weighed on the travel sector, while mining shares also dipped.

The London market underperformed the broader European market, after mid-cap Thomas Cook slumped 19 per cent to its lowest level since March 2013 after saying summer bookings were down 5 per cent as tourists avoided Turkey.

Airline group IAG retreated 2.3 per cent and travel company TUI fell 2.7 per cent, while the FTSE 350 Travel & Leisure index fell 1.9 per cent.

Fresnillo fell 7 per cent, the biggest drop on the FTSE 100, as the precious metals miner was also hit by a downgrade to “sell” from “neutral” by analysts at Citi.

Royal Mail dropped 3.9 per cent after warning it faced slightly higher than expected costs to modernise its operations in what it said was an extremely competitive domestic market. Merlin Entertainments, the operator of the Legoland and Alton Towers theme parks, also warned of tough trading conditions. Its shares fell 4.7 per cent.

The top riser on the FTSE 100 was private equity firm 3i Group, up 2.5 per cent after it reported a 17 per cent increase in its net asset value year-on-year to £4.5 billion.

EUROPE

The pan-European FTSEurofirst 300 index closed down 1.2 per cent, as European travel and leisure stocks fell 1.5 per cent . The Dax fell 1.5 per cent in Germany, while in France the Cac 40 closed down almost 0.9 per cent.

Banks rose early in the session, led by Germany's Deutsche Bank, after a trader said it would be one of the biggest beneficiaries among European banks if the Fed raises rates, thanks to its US business. The bank closed up 1.3 per cent.

Bayer fell more than 8 per cent, making it the top loser in the FTSEurofirst, after the drugs and chemicals group made a bid for Monsanto. Traders said the move was likely to keep Bayer shares under pressure in the short term.

Among airline stocks Aeroports de Paris fell 1.8 per cent and Air France KLM fell 1 per cent.

NEW YORK

The S&P 500 and Dow touched two-month lows yesterday, a day after hawkish comments from the Federal Reserve suggested interest rates could be hiked as early as June.

Eight of the 10 major S&P sectors were lower, with the industrials index’s 1.7 per cent fall leading the decliners. General Electric’s 1.3 per cent dip was the biggest drag on the S&P index, on which only two stocks were up in early trading.

– (Additional reporting: Bloomberg / Reuters)