Wednesday, 25 March 2015 00:44
LONDON: Shares in German airline Lufthansa tumbled after a plane in its low-cost division Germanwings crashed in the French Alps on Tuesday, with all 150 people on board feared killed.
The Airbus A320 jet, on its way from Barcelona to Duesseldorf, came down near the ski resort of Barcelonnette in southeastern France, officials said.
News of the crash sent shares in Lufthansa sinking more than four percent, but they recovered to end the day down 1.56 percent at 13.57 euros, still the worst performer on the Frankfurt stock market.
“Tragically, market movement cannot always been driven by pure stats,” said Connor Campbell, analyst at Spreadex trading group.
“News that a Germanwings plane has crashed in the south of France caused a fall in (the share price of) Lufthansa … alongside Airbus, the plane’s manufacturer,” he told AFP.
“Much of the selling is due to uncertainty as to the cause, but questions will be asked and investor confidence and the impact of passenger numbers should not be underestimated,” said Guardian Stockbrokers analyst Atif Latif.
Shares in European planemaker Airbus initially sank more than 2 percent in Paris, but ended the day with a gain of 0.52 percent at 60.31 euros.
Eurozone markets mostly pushed higher Tuesday on encouraging economic signals.
Frankfurt’s DAX 30 index climbed 0.92 percent to 12,005.69 points, while the CAC 40 in Paris rose 0.67 percent to 5,088.28 points.
However London’s benchmark FTSE 100 index ended the day down 0.26 percent at 7,019.68 points as data showing the Chinese economy slowing weighed on mining stocks.
– Ultra-pessimists got it wrong –
European stocks had initially fallen in the wake of disappointing Chinese manufacturing data, but perked up after a survey showed eurozone business activity hit a near four-year high in March.
The closely watched Markit Economics report Composite Purchasing Managers Output Index (PMI) rose to 54.1 points from 53.3 in February, putting it well above the 50-point mark that shows growth.
“The eurozone’s economic recovery gained further momentum in March, with the PMI hitting its highest for almost four years,” said Chris Williamson, chief economist at Markit.
“The improvement provides welcome news to a region awaiting signs that the ECB’s quantitative easing is stimulating the real economy.”
Bruno Cavalier, chief economist at Oddo Securities in Paris, said “the ultra-pessimists got it wrong this time.”
He said European businesses and households responded to the calming economic conditions rather than alarmist warnings.
“This wave of optimism will continue to advance” and “all the conditions are there for growth to accelerate,” Cavalier said in a note to clients.
Asian equity markets turned in mixed performances after HSBC’s PMI for Chinese manufacturing plunged to an 11-month low in March at 49.2 points, suggesting a contraction.
However Shanghai climbed 0.10 percent to a near seven-year high on hopes the weak data will spur fresh economy-boosting measures.
Hong Kong finished 0.39 percent lower and Tokyo shed 0.21 percent after closing Monday at a 15-year high.
Seoul rose 0.23 percent and Sydney put on 0.22 percent.
– Ultra-pessimists got it wrong –
European stocks had initially fallen in the wake of disappointing Chinese manufacturing data, but perked up after a survey showed eurozone business activity hit a near four-year high in March.
The closely watched Markit Economics report Composite Purchasing Managers Output Index (PMI) rose to 54.1 points from 53.3 in February, putting it well above the 50-point mark that shows growth.
“The eurozone’s economic recovery gained further momentum in March, with the PMI hitting its highest for almost four years,” said Chris Williamson, chief economist at Markit.
“The improvement provides welcome news to a region awaiting signs that the ECB’s quantitative easing is stimulating the real economy.”
Bruno Cavalier, chief economist at Oddo Securities in Paris, said “the ultra-pessimists got it wrong this time.”
He said European businesses and households responded to the calming economic conditions rather than alarmist warnings.
“This wave of optimism will continue to advance” and “all the conditions are there for growth to accelerate,” Cavalier said in a note to clients.
Asian equity markets turned in mixed performances after HSBC’s PMI for Chinese manufacturing plunged to an 11-month low in March at 49.2 points, suggesting a contraction.
However Shanghai climbed 0.10 percent to a near seven-year high on hopes the weak data will spur fresh economy-boosting measures.
Hong Kong finished 0.39 percent lower and Tokyo shed 0.21 percent after closing Monday at a 15-year high.
Seoul rose 0.23 percent and Sydney put on 0.22 percent.
Copyright AFP (Agence France-Presse), 2015
