Global stocks slip on trade, travel shares get Thomas Cook boost
25,000 Egypt bookings canceled; Tunisia sets up crisis cell to deal with the fallout
Stock markets fell on Monday after President Donald Trump ruled out a partial trade deal with China, casting fresh doubt on any early agreement.
A key survey pointing to weakness in the eurozone economy also weighed heavily on European equity markets, analysts said.
Some travel and tourism stocks, meanwhile, were higher after British giant Thomas Cook went bankrupt. The price of oil steadied after Iran threatened the presence of US forces in the Gulf was causing instability in the region. “Two major factors that remained unresolved are trade disputes and rising tensions in the Middle East,” said Hussein Sayed, chief market strategist at FXTM.
“Investors remain unconvinced that a trade deal is about to see the light of day soon, and that’s likely to put a cap on any further gains in risk assets,” he said.
Equity markets were also tracking comments from Trump saying he wanted to strike a full trade deal with Beijing, knocking back hopes for a piecemeal agreement between the economic superpowers.
“I’m not looking for a partial deal. I’m looking for a complete deal,” he told reporters at the White House. He added that he did not see the
WORLD MARKETS
need for an agreement before the 2020 presidential election.
The remarks tempered recent optimism on the talks, though they came as China hailed progress in preparatory discussions ahead of a planned high-level meeting next month. “The hot and then cold and then hot and cold again US-China trade vibes continue to rattle markets,” said Rodrigo Catril at National Australia Bank.
Some rivals of British travel giant Thomas Cook which declared bankruptcy after last-ditch re-financing attempts failed, saw their shares rise sharply.
TUI shares, listed in London, were up around 7 percent in the European afternoon.
Ryanair traded nearly 1 percent higher and easyJet almost 4 percent, but British Airways parent IAG was lower.
Meanwhile, Tunisia set up a crisis cell to deal with the fallout of the Thomas Cook’s collapse on Monday, officials said.
Tunisian authorities said officials and tourism industry representatives from both countries were to meet on Tuesday with Tunisia’s central bank.
Also on Monday, Blue Sky Group said that 25,000 reservations in Egypt booked up to April 2020 had been canceled.
Blue Sky currently has 1,600 Thomas Cook tourists in Egypt’s Hugharda resort on the Red Sea, its chairman Hossam El-Shaer said in a statement sent to Reuters.
Turkey said it would support local businesses impacted by the collapse of the British tour operator, adding that 21,033 of its customers were currently in the country.