Airlines Rebound

Elena
11 Aug, 2006
New York City

Shares in British Airways PLC rebounded from yesterday

[R]8:00AM Airlines and travel companies rebounded.[/R]
Airlines and travel companies rallied Friday, recovering from sharp losses Thursday when they were hard hit by the discovery of a terrorist plot aimed at trans-Atlantic flights. However, experts repeatedly warned that airlines would likely be hit with higher security costs as airports tighten passenger checks in the long term.

Shares in British Airways PLC ((BAB)) rebounded from yesterday’s declines to gain 0.9% at 373.5 pence on the LSE. On Thursday BA canceled around 400 flights from Heathrow and Gatwick after the authorities revealed they had thwarted a large-scale terror attack. BA said it expected the majority of its flights to operate on Friday, but warned of delays because of the new security regulations.

Among other European airlines, budget airline EasyJet rose 0.9%, Lufthansa was up 0.8%, while Air France-KLM climbed 1.4 %. Shares of travel companies also gained ground. Package tour operator MyTravel added 0.7%, while cruise line Carnival lifted 0.8%. In contrast, Ryanair Holdings PLC lost 0.5% due to the ban on hand baggage as from the beginning of 2006 the budget airline began charging customers for each bag they checked.


[R]7:30AM Japanese stocks fall as GDP disappoints, wile HK advances.[/R]
Asian markets were mixed on Friday. The Nikkei 225 Average ended the day down 0.42% to 15,565.02. Most Japanese exporters lost, with Honda Motor edging down 1.53% and electronics conglomerate Hitachi Ltd. declining 0.57%. Some telecoms gained, with Japan''''s largest phone company, Nippon Telegraph and Telephone Corp up 1.24%. Internet provider Softbank Corp advanced 1.49%. Financial stocks were lower, with Mitsubishi UFJ Financial Group shedding 1.86%.

In Hong Kong, the Hang Seng Index pulled out a 0.16% gain to close at 17,249.95. New World Development and Henderson Land led the gainers. Cathay Pacific Airways moved up 1.87% on speculation it may gain passengers who shy away from U.S. and European carriers. Earlier in the week, Cathay reported better-than-expected earnings on strong passenger numbers. Consumer goods exporter Li & Fung led advancing Hang Seng Index components, adding 4.72% after reporting stronger-than-expected earnings.

Elsewhere around the region, South Korea''''s Kospi index was down 0.94% as major exporters Hyundai Motor and Samsung Electronics lost ground. Australia''''s benchmark S&P/ASX 200 dropped 0.08%, as telecom giant Telstra fell more than 1% a day after reporting disappointing full-year results. China''''s benchmark Shanghai Composite closed down 0.01% and Taiwan''''s Weighted index lost 0.11%.


[R]6:30AM European markets ignore bomb scare to open in positive territory.[/R]
European markets were higher on Friday morning. The FTSE 100 in London added 0.2% at 5,835.2, the Xetra Dax in Frankfurt was up 0.55 to 5,656.76, and the CAC-40 in Paris moved up 0.6% at 5,006.68. On the corporate front, ThyssenKrupp, the German steel and engineering group, topped expectations with pre-tax profits of ˆ806m, up from ˆ577m a year earlier. The stock eased however on profit-taking, losing 0.8%.

Michelin, gained 3% after the French tyre maker said it was planning to lift its tyre prices by 6-8% in reaction to higher raw material costs. AGF, the French insurer, advanced 2.4% following first-half net profit growth of 33%. Allianz, which owns 58% of AGF, moved up 1%. Fortis, the Belgian-Dutch financial group, rose 1.8% after JP Morgan raised its price target on the stock.

Crude oil prices partially recovered early Friday. Light, sweet crude for September delivery gained 24 cents at $74.24 on the NYME. Gold opened Friday at a bid price of $641.00 a troy ounce, up from $640.70 late Thursday. The U.S. dollar gained slightly on the euro Friday, as markets continued to absorb the thwarted terror plot in Britain.

The euro bought $1.2781, down slightly from $1.2784 in late New York trading. The British pound regained some ground to $1.8937, from $1.8922. The dollar also strengthened against the Japanese currency, to 115.70 yen, from 115.27 after weaker-than-expected Japanese economic growth data set off yen-selling.