Airlines hit as Trump and terror spook the markets
Investors around the world were sent on a roller-coaster ride yesterday as crisis engulfed the White House and terror struck in europe.
shares in Asia and europe were on the slide as continuing fears that Gary Cohn, one of the key driving forces behind Donald trump’s economic policy, could resign. In the UK, the FTSE 100 was dealt a double whammy as the tragic terrorist attack in Barcelona held back sentiment in the UK tourist market.
In particular, worries that fewer holidaymakers will be taking to the skies in the wake of the attack walloped airlines as markets opened, although many of the stocks recovered some of these initial losses throughout the day.
At market close, Ryanair had fallen 1.6pc, or €0.3, to €18.6,
EasyJet was down 0.9pc, or 11p, to 1290p, and British Airways owner
IAG had declined 2pc, or 12.5p, to 611.5p. But Wall street pared early losses later in the day after President trump removed controversial chief White House advisor steve Bannon – a key player in the President’s shock victory in last november’s election – from his post. the Ftse 100 fell 0.9pc, or 63.89, to 7323.98, taking its total loss for the last two sessions to 1.2pc.
the chief worry for european investors was that Cohn’s resignation would stop trump from delivering his ambitious corporate tax cuts and $1 trillion infrastructure spend, which were set to send Us markets through the roof.
ex-Goldman sachs banker Cohn – who is reportedly mulling resignation over the Us President’s divisive response to violence in virginia – is seen as a linchpin of trump’s ailing Us administration and has led fiscal reform so far. trump’s economic and infrastructure policy was the key driver behind the original ‘trump trade’ which saw markets soar following his election.
As a result, Laura Lambie, senior investment director at Investec, said any failure by trump to meet spending promises could turn the so- called ‘trump bump’ recently hitting markets into a full-blown slump.
one of the worst affected stocks in the UK was Ashtead, which rents out construction and industrial equipment to the Us construction market. shares fell 0.6pc, or 9p, to 1571p. on the other side of the fence,
Randgold Resources was one of just four Ftse 100 risers after the price of gold hit $1,300 per ounce for the first time since november. this came as nervous investors clambered into the traditional safe haven asset. randgold shares rose 1.2pc, or 90p, to 7495p.
the Us Food and Drug Administration extended the use of Astra
Zeneca’s Lynparza drug for women with ovarian cancer. the drug can now be used by patients with ovarian cancer who have responded to platinum-based chemotherapy in tablet rather than capsule form. shares fell 0.8pc, or 34p, to 4447p.
rival Hikma Pharmaceuticals declined further after posting a profit warning and failing to tell investors when its key generic version of asthma drug Advair will be released, following a delay in May. Analysts at HsBC cut the stock’s target price to 1060p from 1410p and shares fell 6pc, or 71p, to 1119p, making it one of the worst performers on the Ftse 350. Construction supplies company
SIG languished as analysts at Liberum hammered the nail in with a ‘sell’ rating on the back of a poor set of first half results earlier this month. Liberum said sIG, which saw profits fall 20pc in H1, has become unattractive due to investors pushing up its share price by putting too much faith in the ability of Meinie oldersma, who was appointed boss in March, to drive a turnaround. shares edged down 0.8pc, or 1.4p, to 177.1p.