London’s blue-chip stocks fell on geopolitical concerns following the shooting-down of a Russian jet by Turkey but implications have been mixed for firms.
The oil price surged on Tuesday on concerns of disruptions in the area. A barrel of Brent crude rose 2.5% to US$45.95 while West Texas Intermediate gushed 2.4% to US$42.78.
It meant oil stocks performed well today, with Shell (LON:RDSB) gaining 1.2% or 20p to 1,660p, while BP (LON:BP.) lifted 1.1%, or 4p, to 384p.
Chris Beauchamp at IG said: “We have seen oil prices spike again today as markets factor in a greater level of disruption to supplies, while major airline and travel names are under pressure once more.
British Airways owner IAG (LON:IAG) fell 3.2% or 81p to 549p, while easyJet (LON:EZJ) down 3.5% or 57p to 1,589p and TUI AG (LON:TUI) 1.6% lower, or 18p, to 1,070p, also took a hit on the news.
Travel stocks also took a hit from continued worries about the security situation in Europe.
A survey by travel data analysts ForwardKeys showed flight bookings to Paris collapsed in the week following the terrorist attacks.
Jasper Lawler at CMC Markets said the concerns could drift over to the US.
“If US citizens act on the US state department’s travel alert due to increased terrorist threats, the airline industry will see passenger numbers dwindle,” he said.
It meant that, despite a wide-spread rebound from its previously falling oil and mining stocks, the FTSE100 lost around 30 points to 6,276.
Across Europe, markets eased, with both the German Dax and the French Cac40 down 1.4% to 10,933 and 4,820 respectively.
The US markets weren’t quite as negative as their European cousins, after a better than forecast 2.1% annualised third quarter GDP figure, up from the initial 1.5% estimate.
In New York, the Dow Jones Industrial Average fell 0.6% to 17,692.43 while the S&P 500 slid 0.8% to 2,070.63 and the Nasdaq surrendered 1% to 5,051.38.
On the corporate front, B&Q and Castorama owner Kingfisher (LON:KGF) was 3p off at 342p on news that soft French markets and currency headwinds had held back third quarter profits.
Also lower was AO World (LON:AO.), down 14%, or 23p, to 140p.The online white goods retailer tumbled as European expansion and lower UK profits pushed it into the red.
It wasn’t all bad news, however, as power station operator Drax (LON:DRX) lifted 4.5% to 243p after it reiterated its expectations for 2015 despite market conditions remaining challenges.
In the small cap world, KEFI Minerals (LON:KEFI) raised US$4mln (£2.6mln) from the placement of 877mln new shares at 0.3p per share.
More than two thirds of the issue was subscribed for by directors and management of KEFI, as well as its major shareholder Odey Asset Management, which upped its stake to 26%. Shares jumped 8% to 0.32p.
Also higher was Eckoh (LON:ECK) after the secure payments specialist, revealed its recently acquired US arm, Product Support Solutions (PSS), had landed a deal worth a minimum US$2mln. Shares gained 7.6% to 53p.
LUNCHTIME REPORT
The London market slipped further into the red on Tuesday as the shooting-down of a Russian jet by Turkey unsettled traders.
The FTSE 100 Index dropped 79.95 points to 6225 at lunchtime after Turkish F-16 fighter jets downed the Su-24 on the border with Syria.
Turkish military officials said they warned the plane that it was violating Turkish airspace, the BBC reported.
But Russian President Vladimir Putin described the incident as a "stab in the back" committed by "accomplices of terrorists".
Meanwhile, airlines led the London market lower after British Airways and easyJet cancelled all flights from the UK to the Egyptian resort of Sharm el-Sheikh until January.
They halted flights after the UK government said a bomb may have caused the Sinai plane crash, which killed 224 people on October 31.
Shares in BA's owner IAG (LON:IAG) fell 23.5p to 544.5p and easyJet's (LON:EZJ) stock dipped 52p to 1594p. Ryanair (LON:RYA) fell €0.54 to €13.71.
Oil prices were up as traders continued to take comfort from comments by Saudi Arabia that it would work with oil cartel OPEC to stabilise oil markets.
The price of a barrel of Brent crude rose 2% to US$45.78 and West Texas Intermediate put on 1.9% to US$42.5 a barrel.
Travel stocks also took a hit from continued worries about the security situation in Europe.
A survey by travel data analysts ForwardKeys showed flight bookings to Paris collapsed in the week following the terrorist attacks.
Net bookings, which take into account both daily bookings and cancellations, were 101% down on the same period last year.
The group said the number of cancellations had now fallen considerably, but new reservations were proving slow to recover.
News of better-than-expected German business confidence failed to prevent stock markets in Frankfurt and Paris heading south.
In the UK, Bank of England governor Mark Carney told the Treasury Select Committee that interest rates were likely to remain low for some time.
B&Q and Castorama owner Kingfisher (LON:KGF) was 4.9p off at 340.2p on news that soft French markets and currency headwinds had held back third quarter profits.
Defence support services group Babcock International (LON:BAB) fired up 22p to 1027p as it posted higher half-year revenue and profit.
Abzena (LON:ABZA) took a step towards being an integrated drug developer and manufacturer as it unveiled the £10mln acquisition of US-based The Chemistry Research Solution alongside a £20mln City fundraiser. Shares pared earlier losses to stand 1.5p down to 63.5p.
Sound Energy (LON:SOU) spurted 0.38p to 14.38p after saying increased availability of rigs in the oil price downturn had reduced the estimated cost of the Badile exploration well in northern Italy by at least €5mln.
Anglo Asian Mining (LON:AAZ) climbed 0.12p to 5.25p as broker SP Angel welcomed news that it had shipped the first batch of copper concentrate from its plant at Gedabek.
LONDON OPEN
Airlines led the London market lower on Tuesday as oil prices rose and fears about more terror attacks weighed.
Concern about higher fuel costs reduced shares in EasyJet (LON:EZJ) by 64p to 1582p. International Airlines Group (IAG) (LON:IAG) dropped 22p to 546p and Ryanair (LON:RYA) fell €0.39 to €13.86.
Oil prices were up as traders continued to take comfort from comments by Saudi Arabia that it would work with oil cartel OPEC to stabilize oil markets.
The price of a barrel of Brent crude rose 1.4% to US$45.47 and West Texas Intermediate put on 1.5% to US$42.4 a barrel.
Travel stocks also took a hit from continued worries about the security situation in Europe.
A survey by travel data analysts ForwardKeys showed that flight bookings to Paris collapsed in the week following the terrorist attacks.
Net bookings, which take into account both daily bookings and cancellations, were 101% down on the same period last year.
The group said the number of cancellations had now fallen considerably, but new reservations were proving slow to recover.
Ongoing concerns about falling commodity prices also fuelled a 45.12 point dip in the FTSE 100 Index to 6260.
News of better-than-expected German business confidence failed to prevent stock markets in Frankfurt and Paris heading south.
In the UK, the market awaiting of Bank of England governor Mark Carney’s testimony to the Treasury Select Committee for hints about future interest rate moves.
B&Q and Castorama owner Kingfisher (LON:KGF) was 1.2p off at 343.9p on news that soft French markets and currency headwinds had held back third quarter profits.
Defence support services group Babcock International (LON:BAB) fired up 43p to 1048p as it posted higher half-year revenue and profit.
Abzena (LON:ABZA) said it had made an important step to becoming a ‘self-sustaining’ life sciences business as it unveiled the £10mln acquisition of Philadelphia-based The Chemistry Research Solution alongside a £20mln City fundraiser. Shares fell 3p to 62p.
Sound Energy (LON:SOU) spurted 0.5p to 14.5p after saying increased availability of rigs in the oil price downturn had reduced the estimated cost of the Badile exploration well in northern Italy by at least €5mln.
MARKET PREVIEW
UK shares are tipped to start lower on Tuesday as trader sentiment is dented by commodity price falls and losses in the US overnight.
FTSE100 closed down 30 at 6,305 but is today called by financial spreadbetters at IG Index to open around a further 27 points lower.
The benchmark Dow Jones Industrial Index closed the session on Wall Street down 31 at 17,793, while the S&P500 and Nasdaq also lost ground slightly.
The Japanese markets re-opened after a holiday on a weaker note as a relatively stronger yen versus the US dollar weighed on the exports-oriented stocks.
In Asia trading appears mixed. The Nikkei 225 in Japan is up 46 points after being slightly lower earlier while China's Shanghai Composite Index is down 15 and investors do not have a lot of significant economic news to latch onto.
On the UK corporate front today, a notable reporter is Cineworld (LON:CNE), the movie theatre operator, and Cioty analysts expect earnings to be positive.
Despite the dearth of blockbusters, the release of the latest in the James Bond franchise, 'Spectre', is expected to have helped slowing admissions rates.