Trump bump turns to dump for infrastructure and travel firms

TRADER gossip that Donald Trump’s notorious chief strategist Steve Bannon had been given the boot rekindled a slipping Dow Jones in the US yesterday afternoon, as the first signs emerged that the risk aversion dogging global equity markets was coming to an end.

The benchmark US index reversed an early 100-point loss before Bannon’s exit was confirmed, igniting hopes that the chaos in Washington has peaked. Wall Street failed to hang on to the gains, however, with the Dow ending down 76 points at 21,674.5. The afternoon rebound also came too late for gloomy European stock markets, as heavyweights IAG, easyjet and Ryanair bore the brunt of a risk-off mood created by the terror attacks in Catalonia and US President Trump’s unravelling economic plan.

British Airways owner IAG fell hardest in the tourism sector, stumbling 12.5p to 611.5p, with the aviation giant particularly exposed to events in Spain through its airline Iberia and its new long-haul carrier Level, which only operates out of Barcelona.

No-frills carriers easyjet and Ryanair fell more than 3pc in intraday trade due to their reliance on flights to the Spanish coast before paring some losses to drop 11p to £12.90 and €0.31 to €18.60, respectively.

Elsewhere in the tourism sector, cruise ship operator

Carnival shed 65p to £52.90, while Intercontinental Hotels

Group slumped 64p to £39.24.

The mood on the markets had weakened overnight after Mr Trump dumped the Advisory Council on Infrastructure tasked with helping to implement his keystone $1 trillion infrastructure spending plan, with rumours also swirling that Gary Cohn, his chief economic adviser, had resigned.

Although the latter was later denied, concerns mounted that the rogue president lacked the political capital to push through growth drivers such as deregulation and tax reforms.

With Mr Trump’s expected stimulus plans underpinning the rally on stock markets since his election, equities globally retreated on fears that his economic agenda was crumbling.

Rental firm Ashtead and building materials supplier

CRH, two stocks that were propelled by the promise of increased spending in the US, retreated as the Trump bump turned into the Trump dump for stocks reliant on infrastructure expenditure.

“Both companies have high revenue streams from the US and Donald Trump’s decision to disband the Advisory Council on Infrastructure has put a dent in their share prices,” explained David Madden, CMC Markets analyst.

CRH tumbled 52p to £26.71 while Ashtead dipped 9p to £15.71 as European markets reverted back to the risk-off mode that held back equities last week, a broad-based decline pulling the FTSE 100 63.89 points lower at 7,323.98.

Only a handful of stocks escaped the sell-off with Randgold Resources

nudging up 90p to £74.95 as risk aversion supported gold prices.

Packaging giant Mondi was another to swerve the losses, edging up 7p to £20.68 following an upgrade to “buy” from Citi.