INTERNATIONAL. Asia stock markets rebounded today after yesterday’s dramatic interest rate cut by the US Federal Reserve.
The Fed (the US central bank) slashed interest rates to 3.5%, its biggest cut in 25 years, in an effort to stave off recession in the US. European and Asian markets generally reacted positively to the unexpected move.
The US crisis has serious repercussions for the travel retail sector, due to its potential impact on consumer confidence, discretionary spending and currency fluctuations abroad.
In the US, the Dow Jones closed Tuesday -1.1% lower, far short of the catastrophic fall many had feared. The UK’s FTSE 100 index ended +2.9% higher; France’s Cac 40 was up +2.1% while Germany’s Dax index recovered to only lose -0.3% on the day’s trading.
Today (Wednesday) Japan’s Nikkei 225 index closed +2.0% higher after suffering its worst two-day slump in 17 years. South Korea (+1%) and Hong Kong (+5%) also saw rebounds following days of heavy losses. Australia came off a 12-day losing streak, closing ahead by +4.4%.
Japanese Finance Minister Fukushiro Nukaga applauded the Fed’s move, saying he hoped it would stimulate the local market and economy. “I expect the move will stabilise US financial markets and the global economy as a whole,” he told reporters.
Travel retail-related stocks had a mixed day yesterday. Among pure travel retail stocks, Autogrill, owner of Alpha Airports Group, HMSHost and the co-parent of Aldeasa, gained +1.2%; Dufry was down -2.83%; and Hellenic DFS fell -8.4% to a 52-week low.
Japan Airport Terminal Co closed Tuesday down -5.38% to a near 52-week low but today had gained +2.33% by late afternoon. Lagardère (Aelia; HDS Retail) bounced back yesterday after sharp losses on Monday to gain +2.47%.
World Duty Free and BAA owner Ferrovial touched a 52-week low, closing just ahead at €38.65 (-3.86%). LVMH (majority owner of DFS Group), a key indicator of confidence in the luxury sector bounced back from its low point of Monday to end ahead by +3.18%.
Stefanel (co-parent of The Nuance Group) bounced back yesterday after slumping to a 52-week low earlier of €1.31, gaining +2.31% on the day. But in South Africa Tourvest (Tourism Investment Corporation) fell -7.49 to a year-low of SAR210.00.
NOTE: The Moodie Report assesses the stock performances of 14 travel retail-related stocks each month in “˜The Moodie Reportfolio’ and daily on this website’s Stockwatch tickertape.
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Travel retail stocks slump as sector assesses fall-out of markets crash – 22/01/08
