Airline stocks hit as Turkey downs jet


HONG KONG: Asian stock markets retreated on Wednesday, with airlines taking a hit as dealers fret over increased geopolitical tensions following the downing of a Russian jet by Turkey.

The losses tracked a sell-off in tourism-linked firms in the United States and Europe as already delicate nerves were frayed on trading floors after Turkey shot down the Russian warplane on the Syrian border.

The incident also sent oil prices up on concern about supplies.

While Ankara said it acted after the jet entered its airspace, Russian President Vladimir Putin called it a “stab in the back” and warned of serious consequences. Moscow insists the plane was in Syrian territory.

The incident has ratcheted up tensions between the rival players in the Syrian war, and with NATO backing its member Turkey there are fears the crisis could escalate beyond the Middle East.

“A spreading and escalation in recent terror attacks and now the downing of a Russian warplane by Turkey are raising concerns of the possible unforeseen spillover impacts of Middle East conflicts,” Con Williams, a rural economist at ANZ Bank New Zealand, said in a note to clients.

“The accumulation of these events is now beginning to have an influence on global markets,” he added, according to Bloomberg News.

Worries about global security and its effect on the economy were already playing on dealers’ minds following the Paris attacks this month and the bombing of a Russian passenger plane in Egypt.

The city of Brussels will stay at the highest security threat level for another week over fears of an imminent attack.

‘Increased terrorist threats’
On Monday Washington issued a world travel alert, warning Americans of “increased terrorist threats” and saying they should “exercise vigilance when in public places or using transportation.”

Airline shares fell in Asia. Sydney-listed Qantas was down 1.6 percent, Cathay Pacific in Hong Kong shed two percent, ANA lost 1.7 percent in Tokyo and Seoul-listed Korean Air Lines was 0.7 percent off.

The losses came after a sell-off in travel firms during New York and European trade. Expedia, TripAdvisor and United Continental sank in the US, while Lufthansa and British Airways’s parent IAG fell in Europe.

London, Frankfurt and Paris all ended in the red but edged higher in early trade Wednesday.

Wall Street enjoyed a positive close, as energy firms were boosted by an uptick in crude prices.

Both US benchmark West Texas Intermediate and European benchmark Brent surged more than a dollar Tuesday. However, they reversed slightly in Asia, with WTI down 0.5 percent and Brent dipping 0.3 percent.

Among Asian stock markets, Tokyo, Sydney and Hong Kong were down, but Shanghai ended higher for a second straight day.

The dollar stepped back against emerging-market currencies after a dip in US consumer confidence and despite an upward revision of economic growth.



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