European stock markets drop; aviation sector wanes
London's FTSE 100 index of top companies fell 0.45% to 6,842.84 points.
LONDON (AFP) - European stock markets dropped on Wednesday after recent rallies, while the aviation sector took a knock as Emirates airline cancelled a major order of Airbus planes.
Analysts said dealers were taking a breather after a recent winning streak on global markets fuelled by a batch of upbeat data, including on US jobs, Japanese economic growth, and Chinese manufacturing and trade.
London s FTSE 100 index of top companies fell 0.45 percent to 6,842.84 points approaching midday in the British capital, with losses limited by official data that revealed a further drop in British unemployment to a fresh five-year low point.
Frankfurt s DAX 30 shed 0.71 percent to 9,958.03 points. On Tuesday, the index touched a fresh record high, one day after it breached 10,000 points for the first time.
The CAC 40 in Paris was meanwhile down 0.61 percent to 4,566.87 points in Wednesday trading after ending at its highest point since June 2008 a day earlier.
- Aviation price crash -
Shares in the aviation sector dived.
"News of a sudden order cancellation knocked back Airbus and Rolls Royce, and a second bolt from the blue came from Lufthansa, which issued a surprise downgrade to forecasts, knocking back UK-listed airlines too," said Brenda Kelly, chief market strategist at IG traders.
Emirates on Wednesday announced that it had cancelled an order for 70 long-haul A350 planes from European manufacturer Airbus.
Airbus added that it was still very confident of the A350 programme and said there were almost 750 planes on the order book ready to enter service.
In London, engine maker Rolls-Royce said the cancellation would slash the value of its order book by 2.6 billion pounds (3.2 billion euros, $4.3 billion).
In reaction, shares in Airbus dropped 4.31 percent to 51.55 euros and Rolls-Royce lost 2.36 percent to 1,050.64 pence.
Airlines slumped heavily meanwhile, with Lufthansa diving 13.59 percent to 17.21 euros and Air France-KLM falling 5.48 percent to 11.22 euros. In London, British Airways and Iberia parent group IAG shed 5.57 percent to 389.6 pence and Easyjet slid 3.35 percent to 1,539.65 pence.
Lufthansa cut its earnings targets for this year and next in the face of disappointing developments in passenger and freight business in addition to financial fallout from strikes.
"The executive board is reducing its operating profit forecast for 2014. It now expects an operating result of approximately 1.0 billion euros ($1.3 billion)," it said in a statement.
Meanwhile shares in French steel pipes maker Vallourec slumped 11.62 percent to 34.86 euros, after it slashed its targets over falling demand in Brazil.
- Euro drops -
Asian stock markets ended mixed on Wednesday, with Tokyo s Nikkei index bouncing back from the previous day s losses and the bourses in Hong Kong and Sydney both falling.
The Dow on Wall Street marked up yet another record high, but with few catalysts to drive trade, investors stayed on the sidelines.
In foreign exchange trading, the European single currency fell to $1.3529 from $1.3545 late in New York on Tuesday.
The euro slipped to 80.55 British pence from 80.82 pence.
The British pound grew to $1.6788 from $1.6756 on Tuesday.
On the London Bullion Market, gold prices rose to $1,261.27 an ounce from $1,259.50 late on Tuesday.
