Travel sector stocks rocked by escalating terror fears

Heightened terror fears battered tourism sector stocks Tuesday, with airlines and hotel groups especially affected after the United States issued a travel warning.

Russia, meanwhile, confirmed that a warplane shot down by Turkey on the Syrian border was one of its fighter jets but insisted the plane had not violated Turkish airspace.

European equities were in the red all day amid a war of words between Russia and Turkey, with London's benchmark FTSE 100 index closing down 0.45 percent and Frankfurt's DAX 30 and the CAC 40 in Paris both dropping nearly 1.5 percent.

US stocks also spent a good part of the day in negative territory, but a surge in oil-related equities sparked by the Russian plane incident pushed Wall Street stocks back into the black, lifting the S&P 500 to a modest 0.1 percent gain.

Dow member ExxonMobil gained 2.0 percent, oil-services company Weatherford International jumped 5.5 percent and smaller oil producer Apache added 4.2 percent.

In Britain, budget airline easyJet and British Airways announced they had cancelled all flights to and from the Egyptian resort of Sharm el-Sheikh until next year over security concerns raised by the downing of a Russian airliner in Egypt last month. Russia last week said the plane was blown up in a "terrorist attack."

The Belgian government announced that Brussels will stay at the highest security threat level for another week over fears of an imminent terror attack.

"The heightened geopolitical threat from the Russian jet being downed by Turkey, while Brussels remains in lockdown, is sending people into safe havens like the yen and gold and out of travel-sensitive stocks," said Jasper Lawler, an analyst with traders CMC Markets.

"The rebound in the oil price is also a negative for fuel prices for airlines," he told AFP.

Those negative sentiments were further fed by an advisory from the US State Department late Monday warning American citizens of "increased terrorist threats" in the wake of the Paris attacks.

"US citizens should exercise vigilance when in public places or using transportation," it said, advising Americans to avoid large crowds or crowded places and to "exercise particular caution during the holiday season."

In London, easyJet slumped 3.3 percent and British Airways's parent IAG lost 3.5 percent.

Shares in German airline Lufthansa shed nearly four percent in Frankfurt. In Paris, French hotels group Accor sank 4.9 percent.

In the US, the online travel site Expedia fell 2.9 percent, while rivals Priceline and TripAdvisor dropped 1.9 percent and 2.2 percent respectively. United Airlines's parent United Continental dropped 3.0 percent and Delta Air Lines lost 3.1 percent.

- Key figures around 2200 GMT -

New York - Dow: UP 0.11 percent at 17,812.19 (close)

New York - S&P 500: UP 0.12 percent at 2,089.14 (close)

New York - Nasdaq: UP 0.01 percent at 5,102.81 (close)

London - FTSE 100: DOWN 0.45 percent at 6,277.23 points (close)

Frankfurt - DAX 30: DOWN 1.43 percent at 10,933.99 (close)

Paris - CAC 40: DOWN 1.41 percent at 4,820.28 (close)

EURO STOXX 50: DOWN 1.04 percent at 3,409.60 (close)

Tokyo - Nikkei 225: UP 0.23 percent at 19,924.89 (close)

Euro/dollar: UP to $1.0642 from $1.0636 in late US trade on Monday

Dollar/yen: DOWN to 122.55 yen from 122.83 yen