FTSE 100 tilts lower, but travel stocks shrug off terror attacks

The FTSE 100 shed 0.1% at 7,012.86 as commodity and consumer goods shares fell. But consumer services, industrial and healthcare shares advanced. The index on Monday rose 0.1%.

In individual stocks, Lloyds Banking Group moved higher on deal news, while those in the London Stock Exchange Group lost ground on reports of talks with Euronext.

Travel stocks came into focus after attacks in Europe on Monday. In what German authorities are calling a “probable terror attack”, a truck plowed into a popular Christmas market in Berlin Monday night, leaving at least 12 dead. Earlier the same day, Russia’s envoy to Turkey was shot and killed in Ankara during a gallery opening, and three people were killed at a shooting at an Islamic centre in Zurich.

Most travel shares started in the red Tuesday then began to turn higher. EasyJet rose 0.9%, Premier Inn hotel chain owner Whitbread gained 0.4%, and travel services provider TUI picked up 0.3%.

But British Airways parent International Consolidated Airlines Group shed 0.1%, and InterContinental Hotels Group slipped 0.1%.

“The usual knee-jerk sell off on fears of a negative business knock-on for the likes of easyJet (EZJ), Ryanair (RYA), Int. Cons Airlines (IAG), Thomas Cook (TCG) and TUI (TUI) simply hasn’t materialized. Perhaps festive travel is regarded as something which simply can’t be eschewed,” said Mike van Dulken, head of research at Accendo Markets, in a note.

“The market response to each new terror event is less and less pronounced. Over the years, investors have learned to live with horror on a far too regular basis, leading to faster and faster near-term recovery in the aforementioned stocks,” he said.

Lloyds Banking Group was up 0.8% after the company said it’s buying MBNA, the UK credit-card business of Bank of America for £1.9 billion ($ 2.35 billion), as part of its plan to expand its consumer finance business.

In other deal developments, London Stock Exchange Group shed 0.3% as the exchange operator is in talks to sell its LCH clearing business to Euronext.

Miners were among those weighing on the FTSE 100, with Randgold Resources down 1.6% as gold prices fell. Glencore off by 0.8% and BHP Billiton lower by 0.7%.

The pound was buying $ 1.2380, compared with $ 1.2406 late Monday in New York.

This article was first published by MarketWatch

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