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18th of July 2011
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Thomas Cook Group drops 28 percent on profit outlook

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by Elaine Frei
Thomas Cook Group drops 28 percent on profit outlook

Europe’s equities markets were lower again Tuesday on concerns that the debt crisis is spreading to Italy and on speculation that the European Central Bank will intervene to make sure a bond auction in Italy this week is successful.

The FTSE 100 was down 1.02 percent to 5,868.96 in London, while the FTSE 250 dropped 0.86 percent to 11,778, with declines coming even though Credit Suisse upgraded the nation’s shares from “benchmark” to “overweight” and UK consumer price inflation dropped to 4.2 percent in June from 4.5 percent in May.

Travel agents led declines on the 250, with Thomas Cook Group (LSE: TCG) down 28.4 percent as the worst performer on the index and in a mostly lower travel and leisure sector after it forecast lower profits as Britons decreased travel due at least partly to civil unrest in North Africa, while TUI Travel (LSE: TT) dropped 7.46 percent for the second-worst performance on the 250.

Chipmaker ARM Holdings (LSE: ARM) did worst on the 100 as it fell 4.94 percent after disappointing results from other chip-related companies.

British Sky Broadcasting Group was down 3.28 percent and was the worst performer in the media sector after the UK government referred News Corp’s (NAS: NWS) bid to the Competition Commission.

Fashion house Burberry Group (LSE: BRBY) was the best performer on the 100 as it added 1.63 percent, while consumer electronics retailer Dixons Retail (LSE: DXNS) gained 6.08 percent to lead advances on the 250 and in a mixed retail sector.

Banks were lower, except for an 0.76 percent gain for Royal Bank of Scotland Group (LSE: RBS), while most other sectors were mostly lower, although the food and beverage sector and homebuilders were mixed.

The FTSE Eurofirst 300 was down 0.48 percent to 1,092.31 while the IBEX fell 0.69 percent to 9,603.4, the Dax was 0.78 percent lower to 7,174.14 and the CAC-40 dropped 0.88 percent to 3,773.88.

Markets in the Asia-Pacific region were lower on concerns that the debt crisis in Europe could spread and get worse, with analysts and investors particularly worried about Italy and Spain, and after legislators in the United States could not agree on deficit reductions.

The Nikkei 225 was down 1.43 percent to 9,925.92 in Tokyo, while the Topix index was 1.49 percent lower and the Mothers market dropped 1.3 percent to 477.61 after the Bank of Japan cut the nation’s growth forecast for the fiscal year ending next March from 0.6 percent in it’s previous estimate to 0.4 percent, blaming the forecast declines on the earthquake last March and its aftermath, while the Bank left interest rates at 0.1 percent.

Banks were lower, with Mizuho Financial Group (TYO: 8411) down 1.5 percent while Sumitomo Financial Group (TYO: 8316) was 2.1 percent lower and Mitsubishi UFJ (TYO: 8306), while traders and oil companies were lower on declines in oil prices.

A stronger yen sent exporters, including carmakers lower, as Toyota Motor (TYO: 7203) dropped 1.9 percent and Honda Motor (TYO: 7267) was down 2.5 percent, while consumer electronics manufacturer Sony (TYO: 6758) was 3 percent lower.

The Straits Times Index was down 1.28 percent to 3,077.36 in Singapore, India’s Sensex fell 1.65 percent to 18,411.6, the Shanghai Composite was 1.72 percent lower to 2,754.58, in Australia the Sydney Ordinaries dropped 1.79 percent to 4,563.5 and the S&P/ASX200 was down 1.9 percent to 4,495.4, Taiwan’s Taiex fell 2.02 percent to 8,491.01, the Kospi was 2.2 percent lower to 2,109.73 in South Korea and Hong Kong’s Hang Seng dropped 3.06 percent to 21,663.2.

New York equities markets were mixed at midday, with the Dow Jones Industrial Average up 0.03 percent to 12,509.9 while the S&P 500 had added 0.05 percent to 1,320.09, but the Nasdaq Composite was 0.35 percent lower to 2,792.71

Crude oil prices were mixed, with August contracts for West Texas Intermediate crude were $1.28 percent higher to $96.43 per barrel in midday trade on the New York Mercantile Exchange while Brent crude was recently reported 26 percent lower to $116.98 per barrel, with gains for WTI coming as the US dollar began to weaken but gains were limited by concerns about European debt.

The price of gold was up $4.90 to $1,554.10 per troy ounce on the worries about Europe, and copper was higher, but silver prices were lower.

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News posted: July 12, 2011

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