Europe midday: Stocks slide amid heightened geopolitical concerns
European stocks fell on Tuesday as geopolitical concerns intensified after a Russian warplane was shot down by Turkey.
At midday, the benchmark Stoxx Europe 600 index was down 1.2%, France’s CAC 40 was off 1.5% and Germany’s DAX was 0.9% weaker.
A military official said earlier that the Turkish Air Force shot down a Russian plane after it violated the country's airspace, although Russia denied this claim.
“The heightened geopolitical threat from the downing of a Russian jet by a NATO member country 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, market analyst at CMC Markets.
The Stoxx 600 travel & leisure index slumped 2.2%, also weighed by the US State Department’s global travel alert on Monday, in which it advised its citizens to exercise vigilance amid “increased terrorist threats”.
On the corporate front, EasyJet shares were under pressure after the low-cost carrier said it was cancelling all flights to and from Sharm el Sheikh until 6 January.
B&Q owner Kingfisher was under the cosh after it said total sales in the third quarter were down 2.5% due to currency effects as a strong UK performance was undermined by continued softer trading in France.
Shares in aerospace supplier Zodiac Aerospace tumbled after it reported a 44.6% fall in core annual earnings.
Telecoms group Altice dropped after shareholder Next Alt, which is owned by Patrick Drahi, said it wanted to exercise a right to 7.5% of its shares.
Luxury shares were under the cosh following a note from Nomura, which highlighted the risk of a sector de-rating. Burberry, Hugo Boss, Swatch, Prada and Richemont were all firmly in the red.
On the upside, offshore driller Seadrill gained despite saying it swung to a net loss in the three months to the end of September, as it announced $600m in cost custs for this year.
In London, Rolls-Royce rallied as investors cheered the engineering group’s restructuring plans.
With so much going on, it was hardly surprising that a stronger-than-expected reading on German business confidence did nothing to lift the mood.
The IFO institute’s headline business confidence index rose from 108.2 in October to 109 in November, beating expectations for an unchanged reading.
Still to come on the macroeconomic calendar, the second release of US third quarter GDP is at 1330 GMT, while S&P Case-Shiller house prices are at 1400 GMT and consumer confidence is at 1500 GMT.