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April 19, 2010    

Thomas Cook Group, other travel shares down on air travel delays

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by Elaine Frei
Thomas Cook Group, other travel shares down on air travel delays

European equities markets were lower Monday as UK Prime Minister Gordon Brown asked the Financial Services Authority there to look into dealings by Goldman Sachs (NYSE: GS) after the US Securities and Exchange Commission filed civil fraud charges against the financial institution late last week, and after Germany’s financial regulator asked the SEC to provide details about its inquiry.

Additionally, travel-related shares declined as airplanes remained grounded in Europe as ash from the eruption of a volcano in Iceland remained in the atmosphere, with UK airspace scheduled to remain restricted until at least Tuesday morning.

The FTSE 100 was down 0.28 percent to 5,727.91 in London, while the FTSE 250 added 0.55 percent to 10,390.86.

Airlines and travel agents were lower in London, led by travel agent Thomas Cook Group (LSE: TCG) with a decline of 1.61 percent, while TUI Travel (LSE: TUI) fell 1.2 percent, British Airways (LSE: BAY) was down 1.4 percent and easyJet (LSE: EZJ) dropped 1 percent.

Ground transport did better, as public transport group Arriva (LSE: ARI), which operates trains and buses, added 3.26 percent after it said it is talks with German state railway Deutsche Bahn.

Banks were mixed in London as the Goldman Sachs issue as investors wondered whether there might be similar charges to those facing GS brought against others in the US financial sector, but Royal Bank of Scotland (LSE: RBS) added 4.35 percent for the best performance in London on the session on the possibility that RBS could sue GS over a loss related to a structured debt product.

Lloyds Banking Group (LSE: LLOY) was also higher on the session as it gained 1.11 percent.

Most miners were lower on more declines in metals prices, with Hochschild Mining (LSE: HOC) down the most with a decline of 2.99 percent, while Aquarius Platinum (LSE: AQP) fell 2.02 percent, Vedanta Resources (LSE: VED) was down 1.97 percent and Fresnillo (LSE: FRES) dropped 1.96 percent.

All insurers were lower, led by Aviva (LSE: AV) with a decline of 2.3 percent for the worst performance on the 100, while Old Mutual (LSE: OML) dropped 2.07 percent.

Over on the 250, manufacturing and engineering group Senior (LSE: SNR) was 3.86 percent higher for the best result of the day on the index, while pay TV set-top box maker Pace (LSE: PIC) did the worst on the index and in London with a decline of 3.91 percent.

The FTSE Eurofirst 300 was down 0.63 percent to 1,088.39 while the Dax fell 0.3 percent to 6,162.44, the CAC-40 was 0.41 percent lower to 3,970.47 and the IBEX dropped 0.53 percent to 11,199.5.

Markets in the Asia-Pacific region were significantly lower Monday on concerns over the charges in the United States against Goldman Sachs and after China took new steps to cool down the property sector there.

Additionally, airlines in the region suffered declines on continuing air travel cancellations in Europe as planes remained grounded due to volcanic ash in the atmosphere from an eruption in Iceland.

The Nikkei 225 was 1.74 percent lower to 10,908.77 in Tokyo, while the Topix index was down 1.82 percent to 970.84 and the Mothers market dropped 1.13 percent to 489.37.

Banks were lower in Tokyo as investors worried that there might be other, similar charges to those against Goldman Sachs brought against others in the US financial sector.

Nomura Holdings (TYO: 8604) was down 2.76 percent while Mitsubishi UFJ (TYO: 8306) fell 3.1 percent and Sumitomo Mitsui Financial Group (TYO: 8316) dropped 3.5 percent.

India’s Sensex was 1.08 percent lower to 17,400.68 while in Australia the Sydney Ordinaries fell 1.36 percent to 4,939.4 and the S&P/ASX200 dropped 1.4 percent to 4,915.1.

The Straits Times Index was down 1.54 percent to 2,960.93, the Kospi fell 1.68 percent to 1,705.3 in South Korea, the Hang Seng dropped 2.1 percent to 21,405.17 in Hong Kong, and Taiwan’s Taiex was 3.17 percent lower to 7,854.22.

The Shanghai Composite dropped 4.79 percent to 2,980.3 after the Chinese government said that banks should not loan money for third-home purchases in some cities where prices have gone up substantially and that they should not loan to buyers who cannot prove they have paid taxes or social security to those cities, and after local governments were given permission to limit how many properties an investor can purchase within a particular period of time.

New York markets were lower on investor concerns about the charges against Goldman Sachs and as the semiconductors sector declined, and even though Citigroup (NYSE: C) released its best quarterly results in three years.

In midday trade, the Dow Jones Industrial Average was 0.18 percent lower to 10,998.71 while the S&P 500 fell 0.53 percent to 1,185.86 and the Nasdaq Composite had dropped 1.04 percent to 2,455.57.

Crude oil prices were again down substantially, with West Texas Intermediate trading at just above $81 per barrel, while metals prices were also lower.

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