News Column

Airline Stocks Lead European Markets Lower

June 11, 2014

BRUSSELS (Alliance News) - European stocks tumbled from their highest in six years on Wednesday, as shares of Deutsche Lufthansa and Vallourec plunged after profit warnings.

Traders were in a cautious mood after the World Bank trimmed its global growth forecast to 2.8% from an earlier prediction of 3.2%, saying developing counties are heading for "disappointing growth."

The Ukraine crisis, financial market turbulence and unusually cold weather in the US were all blamed for the gloomy outlook.

The Euro Stoxx 50 index of eurozone bluechip stocks lost 0.75%, but remains up 1.5% from a week ago.

Across Europe, Germany's DAX slipped 0.8%, France's CAC 40 lost 0.8% and the UK'sFTSE 100 dropped 0.5%.

In corprate news, Deutsche Lufthansa AG shares plunged 14% in Frankfurt after the airline cut its earnings forecasts for this year and next, citing weaker-than-expected revenue in the passenger as well as freight businesses.

Likewise, shares of Vallourec SA lost 11.2% in Paris after the steel pipes maker announced downside adjustments in its 2014 guidance, citing a significant temporary reduction in demand for its oil & gas operations in Brazil and in Europe.

Airbus Group dropped 4% after losing a major aircraft order from Dubai's Emirates airline.

The airline sector was weaker on the news, with engine-maker Rolls Royce slipping more than 5%.

AstraZeneca PLC shares are moved up 1% in London. The British drugmaker said that 43 abstracts reporting results of the company's research and development in diabetes have been accepted for presentation at the 74th scientific sessions of the American Diabetes Association in San Francisco this month.

In economic releases, the UK jobless rate fell to 6.6% during February to April compared to 7.2% during November to January and 7.8% during the same period of last year, official figures showed.

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Source: Alliance News

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