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European markets moved lower in early trade on Friday, with travel stocks leading the losses.
The pan-European Stoxx 600 was around 0.8% lower, while the French CAC 40 was 0.7% lower and the German DAX shed nearly 0.9%. London's FTSE 100 was around 0.6% lower.
The travel and leisure sector shed almost 2% after London's Heathrow Airport closed on Friday following a fire at a nearby electrical substation. British Airways-owner International Airlines Group was trading around 2.3% lower at 9:20 a.m. London time.
Travel stocks
European investors are also digesting monetary policy updates that came from multiple central banks in the region, as well as the U.S. Federal Reserve, this week.
On Thursday, the Swiss National Bank trimmed interest rates by 25 basis points, while the Bank of England held rates steady in the U.K. and Sweden's Riksbank also opted not to alter interest rates.
"Since [our] previous meeting, global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some governments have responded," the Bank of England said on Thursday. "Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally."
It came after the Fed also kept its key interest rate steady on Wednesday. Although the central bank said it still sees two rate cuts happening this year, officials cut their 2025 economic growth forecast for the U.S. and noted that uncertainty had increased, with tariffs poised to add inflationary pressure.
European stocks ended a four-day winning streak on Thursday when the Stoxx 600 shed 0.4% over the course of the trading session. The index, which is up almost 9% since the beginning of the year, is still on track for a weekly gain.
Overnight in Asia, markets were mixed as global economic jitters persisted.
On Wall Street, stock futures fell following a broad selloff on Thursday.
— CNBC's Sophie Kiderlin and Jeff Cox contributed to this report.
Citi shares initial thoughts on Heathrow closure hit to IAG
Citi issued a note on Friday over the potential impact of the Heathrow airport closure on IAG, the owner of British Airways:
"1) the 2017 IT outage cost ~£80m, including £30m in lost revenue; however, we believe much of the cost was compensation - today's fire would appear to be outside of the airline's control, so compensation may not be payable (although they will need to provide food and water and possibly hotel accommodation)," Citi said in the note.
"2) it would appear to be one-off in nature, so we'd argue deserves a one times multiple (£80m is about 0.5% of market cap post tax; 3) if the airport does not open overnight, the costs would increase proportionally."
— Sawdah Bhaimiya
Heathrow airport closure hits stocks
IAG
A fire at a nearby electrical substation caused the closure of Heathrow Airport on Friday, affecting hundreds of flights in and out of the London transport hub. Here are some of the biggest movers as of 8:45 a.m. London time:
- British Airways owner International Airlines Group was trading 3.5% lower;
- EasyJet was down 2.1%;
- Lufthansa was 2.3% in the red;
- Air France was down 2.8%;
- Intercontinental Hotel was trading 2.5% lower.
— Katrina Bishop
Heathrow Airport closes after a nearby fire causes power outage, prompting major travel disruption
London's Heathrow Airport closed on Friday after a fire at a nearby electrical substation caused a power outage, airport officials said.
"Heathrow is experiencing a significant power outage across the airport due to a large fire at a nearby electrical substation. Whilst fire crews are responding to the incident, we do not have clarity on when power may be reliably restored," a Heathrow spokesperson said.
"We expect significant disruption over the coming days and passengers should not travel to the airport under any circumstances until the airport reopens," the spokesperson said.
The airport will remain closed until at least 11:59 p.m. local time on Friday.
"We know this will be disappointing for passengers and we want to reassure that we are working as hard as possible to resolve the situation," a Heathrow spokesperson said.
— Leslie Josephs, Monica Pitrelli
English (US)