Sector movers: Travel stocks hit by geopolitical tensions

The FTSE 100 ended the session 0.45% or 28.26 points lower at 6,227.23, while the FTSE 250 closed 0.92% or 156.94 points lower at 16,949.11, as a Russian jet was shot down by two Turkish jets after allegedly not heeding requests to leave Turkish airspace near the Syrian border.

British Airways owner International Consolidated Airlines Group (down 3.26%) and EasyJet (down 3.16%) led the blue chip fallers, while BBA Aviation (down 8.04%) was among the major midcap fallers. Earlier in the session, British Airways cancelled all flights between Sharm el-Sheikh, Egypt and the UK up to and including 14 January, while Easyjet’s services to the resort are suspended until at least 6 January, owing to security concerns.

Monarch, Thomson and Thomas Cook have all cancelled flights until dates in December following the suspected bombing of a Russian passenger jet.

However on the positive side, uptick in resource stocks balanced the scales to a certain extent. At 1637 GMT, the Brent front-month oil futures contract was up 3.03% or $1.36 to $46.19 per barrel. Meanwhile, WTI was 2.87% or $1.20 higher at $42.95 per barrel on rising tensions in the Middle East.

Meanwhile, base metals recovered from overnight declines in late afternoon European trading. The three-month copper delivery futures contract rose 2.2% to $4,578.00 per metric tonne on the London Metal Exchange. Additionally, primary aluminium (up 0.2%), nickel (up 4.0%), zinc (up 2.9%) and lead (up 2.2%) futures posted upticks as well.

Ongoing geopolitical tension also boosted safe haven demand for precious metals lending modest support to prices. COMEX gold futures contract rose 0.80% or $8.50 to $1,075.10 an ounce, while spot gold was up 0.68% or $7.26 lower at $1,076.44 an ounce. COMEX silver was also up 1.45% or 20 cents to $14.27 an ounce.

Benefitting from the price recovery, Glencore (up 3.94%) lead the FTSE 100 gainers, with Randgold Resources (up 2.88%) not far behind, along with a number of mining and metal stocks. Petra Diamonds (up 4.34%) and Kaz Minerals (up 3.98%) led the FTSE 250 charge.