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Attack dents travel stocks as global sell-off spreads to Europe
Attack dents travel stocks as global sell-off spreads to Europe

Attack dents travel stocks as global sell-off spreads to Europe

Easyjet, Ryanair, British Airways owner IAG and Lufthansa were down 1.9% to 2.7%.
NAMPA
LONDON - European travel stocks fell sharply in early trading on Friday after a deadly attack in tourist hotspot Barcelona, with investors also increasingly concerned the Trump administration was fraying at the seams.

As a global sell-off spread, the pan-European STOXX 600 was down 0.9% by 07:25 GMT, with blue-chips down 1%, following falls in Asian and US stocks overnight. All European sectors were in the red.

Travel and leisure stocks led losses, down 1.4%, with airlines the worst-performing as investors dropped stocks exposed to tourist flows.

Easyjet, Ryanair, British Airways owner IAG and Lufthansa were down 1.9% to 2.7%.

Spanish airport company AENA fell 2% after Thursday's attack, in which a suspected Islamist militant drove a van into crowds in central Barcelona, killing 13 people.

Spanish stocks underperformed peers, falling 1.4%, with Melia Hotels among top weights.

“As we've seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings,” said Neil Wilson, analyst at ETX Capital.

The risk-off moves also hit banks, down 1%, with Deutsche Bank and BNP Paribas among the worst performers.



Company news

Though company news was thin on the ground, earnings drove some moves.

Dutch storage firm Vopak fell 4.5% after it said profit would be 5% to 10% lower this year than last due to lower occupancy rates.

Irish construction firm Kingspan Group jumped 7%, the top gainer after it reported its trading profit grew 6% in the first half and said the Brexit vote had not had a measurable impact on UK business.

Fiat Chrysler fell 1.3% after Guangzhou Auto­mobile denied it was planning to take over the Italian carmaker. Speculation over a potential Chinese buyer had sent its shares soaring last week.

Some stocks with the biggest results-driven losses in the previous session recovered ground: Vestas Wind and Wienerberger gained 2.8% and 3.8%.

Meanwhile Straumann, the top gainer on Thursday after a profit beat, fell back 3.5% as investors moderated their ­enthusiasm.

The European earnings season is drawing to a close, with 86% of second-quarter company reports through.

Some 60% of these have beaten or met ­expectations and earnings estimates were trending up, though they were still negative overall after being revised down sharply since the start of earnings season due to concerns about a stronger euro.

“In contrast to the pattern of the last several years in which earnings have routinely disappointed lofty analyst expectations, this year analysts have been overly bearish and earnings have surprised to the upside,” said Jon Ingram, portfolio manager at JP Morgan Asset Management.
– Nampa/Reuters

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