Stocks advance despite fears over Syria

Ryanair shares plummet the most in more than five years in London trading

The boring old line that the markets don't like surprises was a regularly-voiced one yesterday as Ryanair shares plummeted in the wake of the usually bullish airline issuing an unexpected profit warning.

The reasoning behind the Ryanair statement led to a swift change of sentiment in relation to airlines generally and low-cost airlines in particular.

Meanwhile, jitters about possible Western attacks on Syria battled with positive economic indicators over how sentiment generally would affect markets, most of which ended up in positive territory.

Ryanair kept traders busy with something close to 10 times an average day's number of shares changing hands in the wake of the early morning statement that its full- year profit would be at the lower end of its forecast range of €570 million to €600 million.

The carrier said the heatwave across Europe trimmed bookings and that it had noticed in recent weeks a perceptible dip in forward fares and yields into September, October and November, which had been hit by increased price competition and increased capacity in the UK, Scandinavia, Spain and Ireland.


Ryanair share price fell by almost 15 per cent before recovering in the afternoon to close at €6, a fall of 11.41 per cent.

Aer Lingus closed at €1.58, having suffered a fall of 5.84 per cent.

The Iseq closed down 1.6 per cent, at 4,162.55, taking it in the opposite direction to most other European indices.

CRH closed at €16.45, marking a rise of 1.17 per cent, while Bank of Ireland fell 1.34 per cent, to close at €0.2210.

UK stocks were little changed, as travel companies declined on the FTSE 100 Index and US officials voiced support for President Barack Obama's call to take action against Syria.

The FTSE 100 Index rose 6.33 points, or 0.1 per cent, to 6,474.74 at the close. The gauge reversed a loss of as much as 0.7 per cent as Citigroup recommended investors buy UK equities. The gauge fell 3.1 per cent in August on concern that the Federal Reserve will start reducing stimulus measures this year, and while the US and its allies threatened military action against Syria.

Ryanair slumped the most in more than five years in London trading after its surprise early morning statement. EasyJet lost 5.1 per cent and International Consolidated Airlines Group slipped 1.3 per cent.

EasyJet closed at 1,215 pence and British Airways parent IAG fell to 291 pence. A measure of travel and leisure companies listed on the broader FTSE 350 Index fell 0.9 per cent.

National benchmark indexes advanced in 12 of the 18 western-European markets. France's CAC 40 and Germany's DAX gained 0.2 per cent.

Italy's FTSE MIB Index declined 1.4 per cent as the Repubblica newspaper reported that former Italian Prime Minister Silvio Berlusconi may consider withdrawing his support for the coalition government.

France's Orange climbed 1.6 per cent to €8.05. Finmeccanica gained 3.6 per cent to €4.05.

US stocks jumped for a second day, retracing most of last week's Syria-related losses as the strongest monthly US car sales figures in almost six years added to optimism about the economy.

Financials and technology companies led gains on the S&P 500 along with the consumer discretionary sector, with shares of Ciena, a provider of fiber- optic networking gear for carriers such as ATandT, jumping 13.5 per cent to $23.48 on four times its average daily volume after an upbeat revenue forecast.

Shares of Ford were up 3.7 per cent at $16.95 while GM shares were up 4.7 per cent at $35.75.

The auto sales data pointed to the industry‘s strongest month since just before the start of the 2007-2009 recession. – (Additional reporting Bloomberg, Reuters)

Colm Keena

Colm Keena

Colm Keena is an Irish Times journalist. He was previously legal-affairs correspondent and public-affairs correspondent