European shares decline as airline stocks slump

jueves 21 de julio de 2016 04:58 GYT

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* Airlines slump as Lufthansa issues profit warning

* STOXX 600 index down around 7 pct so far in 2016

By Sudip Kar-Gupta

LONDON, July 21 (Reuters) - European stock markets fell on Thursday, weighed down by a drop in the shares of major airlines after Lufthansa issued a profit warning.

The pan-European STOXX 600 index and the similar FTSEurofirst 300 were both down by 0.5 percent, with many investors focusing on the European Central Bank's meeting later in the day. The euro zone's central bank is all but certain to keep rates firmly on hold although it may signal tweaks to its stimulus measures as it tries to address obstacles to its efforts to revive growth and inflation.

Airline stocks fell sharply amid fears that consumers may be off travelling abroad for holidays by last week's attack in Nice, for which militant group Islamic State has claimed responsibility, and attempted coup in Turkey.

Lufthansa slid 8 percent after issuing a profit warning, with rival Air France-KLM also falling 4.3 percent. easyJet dropped 4.5 percent after posting lower revenues.

"The airline sector is under pressure. We don't own any airline stocks for now and we prefer the tech and healthcare sector," said Francois Savary, chief investment officer at Geneva-based fund management and consultancy firm Prime Partners.   Continuación...