At the close: FTSE 100 index closes down on airlines and Burberry

James Nickerson
Follow James
British Airways Affected By Second Phase Of Strikes
British Airways owner IAG saw its share price fall today on geopolitical tensions (Source: Getty)

The FTSE 100 fell on Tuesday, led lower by airline stocks and Burberry Group.

The UK's top blue-chip index closed 0.45 per cent down at 6,277 points.

EasyJet and International Consolidated Airlines Group (IAG) were both among the largest casualties, falling 3.22 per cent to 1,594p per share and 3.08 per cent to 550.25p per share respectively.

Read more: Kingfisher brings home sales of £2.7bn in third quarter results

British travel and tourism stocks were hit after data from ForwardKeys, which looks at daily travel industry passenger reservation data and trends, showed new flight bookings to Paris, one of the world's most visited cities, have fallen by over a quarter in the week following the 13 November attacks that killed 130 people.

"Airlines took the brunt of the selling on the FTSE 100 as geopolitical tensions sent shares of Easyjet and IAG crashing. If US citizens act on the US state department’s travel alert due to increased terrorist threats, the airline industry will see passenger numbers dwindle," said Jasper Lawler, an analyst at CMC Markets. "If terrorism threatening tourism wasn’t enough, another downed jet cast another shadow over airlines. It may have been a fighter jet this time but flying on holiday to Turkey doesn’t look so attractive when they’re shooting down aeroplanes."

Read more: FTSE 100 opens down on Pearson and tourism

Meanwhile, Burberry's stock fell 5.25 per cent to 1,192p per share. Earlier today Nomura downgraded Burberry from "buy" to "neutral". "Macroeconomic trends remain mixed for the luxury sector, and we believe consensus expectations may be too high for [2016], thus there is a risk of a sector de-rating," analysts at Nomura said in a note.

But miners made gains, with Glencore 3.86 per cent up for the session at 93.88p per share. Anglo American's share price rose 2.55 per cent to 452.38p per share.

Fresnillo rose 1.64 per cent at 712.5p per share and BHP Billiton's share price was up less sharply by 0.46 per cent to 875.2p per share, while Randgold Resources' share price rose 2.76 per cent to 4,065.5p.

"The commodity bounce has helped the mining sector including Glencore shares towards the top of the FTSE 100. The flight to safety benefited gold which peaked back above $1180 per ounce, helping gold-mining shares Randgold and Fresnillo jump," Lawler added.

Babcock International Group, however, led the risers, up 3.08 per cent to 1,036p per share after posting underlying revenue up 12 per cent for the first half of 2015.

Related articles