European stocks slide as downing of Russian jet over Syria unsettles investors

LONDON – European stock markets slid Tuesday as jitters about instability in the Middle East intensified following the downing of a Russian jet by Turkey over Syria.

KEEPING SCORE: In Europe, France’s CAC 40 was down 1.8 per cent at 4,801 while the FTSE 100 index of leading British shares fell 1 per cent to 6,240. Germany’s DAX was 1.1 per cent lower at 10,972. Wall Street was poised for a lower opening with both Dow futures and the broader S&P 500 futures 0.4 per cent lower.

INSTABILITY RISK: Turkey shot down a Russian warplane that it said had violated Turkish airspace and ignored repeated warnings, ratcheting up geopolitical tensions and sending investors scrambling out of stocks in search of safe havens. Russia denied the plane crossed Syria’s border into Turkey and says the pilots parachuted but that there has been no contact with them. There are local reports that one of the pilots is dead. NATO, of which Turkey is a member, will hold an emergency meeting later.

ANALYST TAKE: “The latest geopolitical incident, this time the shooting down of a Russian jet by Turkish forces, appears to have spooked the markets,” said Connor Campbell, a financial analyst at Spreadex.

COMMODITY CRUNCH: Investors are also keeping a close watch on developments in commodity markets after raw materials such as copper and nickel slid to multi-year lows on concerns over the global economy and the dollar’s strength in the run-up to next month’s expected rate hike from the Federal Reserve.

FED FOCUS: Most investors expect the Fed to raise interest rates from a record low at its mid-December meeting. That contrasts with monetary policy from other major central banks in Japan and Europe, which are expected to keep the stimulus taps open.

ASIAN SCORECARD: Japan’s Nikkei 225 index recovered from early losses to finish 0.2 per cent higher at 19,924.89 after reopening following a public holiday. South Korea’s Kospi climbed 0.6 per cent to 2,016.29. Hong Kong’s Hang Seng lost 0.4 per cent to 22,587.63 and the Shanghai Composite Index in mainland China fell 0.2 per cent to 3,616.11. Australia’s S&P/ASX 200 shed 1 per cent to 5,226.40.

ENERGY: The benchmark U.S. crude futures contract was up 58 cents at $42.33 a barrel on the New York Mercantile Exchange while Brent crude, which is used to set prices for international oils, rose 64 cents to $45.47 a barrel in London.

CURRENCIES: The euro was up 0.1 per cent at $1.0647 while the dollar fell 0.3 per cent to 122.57 yen.