Woes in the travel and leisure sectors yesterday dragged down London’s blue-chip FTSE. The index closed down 28.26 points, or 0.5 per cent, at 6,277.23 points, extending the previous session’s losses.
Russian President Vladimir Putin added to concerns after a Russian jet was shot down by Turkey on the Syrian border.
The Russian leader described the incident as a “stab in the back” committed by “accomplices of terrorists”.
Easyjet airline shares fell 3.16 per cent after it suspended all flights to Sharm el-Sheikh in Egypt, where a Russian passenger jet was brought down by a suspected bomb last week, until 6 January.
British Airways owner IAG tumbled 3.26 per cent, while German airline Lufthansa was down 3.98 per cent.
BA flights to the resort have been cancelled until 14 January.
Hoteliers also took a hit, with Premier Inn owner Whitbread down 3.17 per cent and InterContinental Hotels down 1.65 per cent.
Travel operator TUI’s share price closed down 1.65 per cent.
Fashion house Burberry was the biggest faller in the FTSE 100, down five per cent after Nomura cut its rating on the stock to “neutral” from “buy”, citing a downside risk to consensus expectations.
The market reacted badly to interim results from DIY group Kingfisher, with its share price dropping 1.83 per cent. It posted a fall in third-quarter profits, blaming adverse currency movements.
Engineering company Babcock International ended the day up 2.96 per cent, as the market cheered a seven per cent rise in half-year, pre-tax profits to £146.3m and said it was on track to meet its full-year targets.
Bank of England governor Mark Carney spoke before the Treasury Select Committee yesterday morning, but was vague on when a interest rate rise may come. He backed up the current record low interest rate policy, citing external risks, demographic changes and the impact of technology on the labour market.
Today will be dominated by chancellor George Osborne’s Autumn Statement. There are significant cuts expected to a whole raft of government departments so expect turmoil for government supplier and contractor stocks if the news is worse than expected, although these have been well telegraphed.