International Events causing Financial Issues.

International Events causing Financial Issues.

Market Report: Travel stocks were the biggest casualties after Turkey shot down a Russian warplane

Investors offloaded risky assets amid heightened international security concerns after Turkey shot down a Russian warplane and the US issued a global travel alert for American citizens.

The latest military action near the Syrian border prompted European bourses to tumble into the red, as the escalating tension prompted nervous investors to flee to safe havens, such as gold stocks. The pan-European FTSEurofirst 300 index slipped 1.3pc to 1,481.27. Meanwhile, back in London, the FTSE 100 fell 28.26 points, or 0.45pc, to 6,277.23.

However, Rebecca O’Keeffe, of Interactive Investor, said it’s “unlikely to have a long-term impact on global markets”, as the downing of the Russian plane says “more about the complex internal politics in Turkey than about the state of the global war against Islamic State”. Nonetheless, Ms O’Keeffe highlighted the increasing threat of terrorism is “creating greater uncertainty” across financial markets. * Turkey shoots down Russian warplane on Syria border: Vladimir Putin warns of 'serious consequences' - latest Separately, data provided by travel information group ForwardKeys revealed that new flight bookings had slumped by 27pc since the attacks on November 13. The report also showed there were 21pc more cancellations between November 14 and 21 when compared with the same period last year.

France, which is the most-visited country in the world, is now facing a “worrisome” Christmas period, the group said, as bookings for the festive season are currently 13pc behind last year’s figures.

Airline stocks were heaviest hit, with British Airways owner IAG falling 3.3pc to 549.5p, and low-cost carrier easyJet 3.2pc lower at £15.94. Both airlines also announced that they will not use Sharm el-Sheikh airport until at least the new year. The decision was made after discussions with the Department of Transport. Earlier this month, flights to the Egyptian resort were suspended after a Russian airplane crashed in the Sinai desert, following a suspected bombing.

InterContinental Hotels (Other OTC: ICHGF - news) fell 1.7pc to £24.41, while cruise operator Carnival tumbled 2.5pc to £33.93. Tour operators TUI AG (LSE: TUI.L - news) and Thomas Cook fell 1.7pc and 3.7pc, respectively. easyJet one-month graph (Source: Bloomberg)

Meanwhile, gold prices jumped by as much as 1.1pc to $1,081 following the news, sending shares in Randgold Resources and Fresnillo (Other OTC: FNLPF - news) towards the top of the FTSE 100 leader board - up 2.9pc and 1.9pc, respectively.

Brent crude oil prices had already jumped 2.4pc on Monday after Saudi Arabia pledged to work towards stabilising oil prices, and a day later, they rose 3.7pc amid the prospect of increased turmoil in the Middle East. Royal Dutch Shell B shares advanced 1.6pc to £16.68, while BP added 1.4pc to close at 385.9p.

Away from international security concerns, luxury fashion house Burberry became the biggest laggard on the FTSE 100 after Nomura slashed its rating from “buy” to “neutral”.

The broker said: “Macroeconomic trends remain mixed for the luxury sector, and we believe consensus expectations may be too high for 2016, thus there is a risk of a sector de-rating.” Shares (Berlin: DI6.BE - news) plunged 63p, or 5pc, to £11.95.

Miners enjoyed a trading session in positive territory, with Glencore (Amsterdam: GX8.AS - news) topping the FTSE 100 amid reports its Zambian unit had laid off 4,300 staff. Shares in the Switzerland-based group jumped 3.9pc to 94p.

Meanwhile, a bearish note from Investec’s Hunter Hillcoat warned the possibility BHP Billiton (NYSE: BBL - news) will reduce its now “onerous progressive dividend is gaining ever-increasing market acceptance”.

In light of plummeting commodity prices, Mr Hillcoat said BHP is “a victim of its own success”, as growth in its dividend over the past 15 years had now outpaced its ability to deliver the necessary earnings to support it.

Despite the cautious note, BHP Billiton advanced 0.5pc to 875.8p. Its peer Anglo American climbed 2.5pc to 452p. * Harmless commodity crash accelerates as dollar soars On the other side, Merlin Entertainment tumbled into negative territory after an investigation into a roller coaster crash at an Alton Towers theme park in Staffordshire earlier this year revealed it was caused by human error. The FTSE 100 stock slipped 10.4p to 395.9p following the announcement.

Elsewhere, amid speculation of a rights issue on Monday, shares in supermarket giant Tesco (Xetra: 852647 - news) slumped to its lowest level in 12 years - down 0.7p to 164.4p. The stock was also hurt after grocery chain SuperValu (NYSE: SVU - news) , owned by the Musgrave group, knocked Tesco off its position as market leader in Ireland (Other OTC: IRLD - news) . Tesco holds a 24.1pc of the market, while SuperValu claimed the top spot with a 24.6pc share. * Tesco drivers threaten strike action after pay freeze On the mid-cap index, AO World (Other OTC: AOWDF - news) became the biggest casualty after half-year earnings fell after its expansion into continental Europe weighed on figures. The domestic appliances retailer posted an operating loss of £8.9m due to a combination of volatile trading patterns and a significant marketing investment. Shares plunged 23p, or 14.1pc, to 140p.

Another mid-cap stock NMC Healthcare jumped 46.5p, or 6.1pc, to 810p, after it revealed it will buy a 51pc stake in Fakih IVF, a market leader for IVF services in the Middle East, for $189m. Analysts at Deutsche Bank (Other OTC: DBAGF - news) said they expect the acquisition will help NMC (Other OTC: NMCX - news) become “a global player in the highly profitable IVF segment” and will also generate “significant synergies in the form of cross-referral of patients”.