LONDON: Heightened terror fears battered tourism sector stocks Tuesday, with airlines especially affected after the US issued a travel warning and Turkey shot down a Russian warplane.
Shares in airlines as well as in travel and hotel groups slid after the United States issued a worldwide travel alert for its citizens on Monday.
Russia meanwhile confirmed that a warplane shot down by Turkey on the Syrian border was one of its fighter jets but insisted the plane had not violated Turkish airspace.
In Britain, budget airline Easyjet announced it had cancelled all flights to and from the Egyptian resort of Sharm el-Sheikh until next year over security doubts raised by the downing of a Russian airliner last month.
Brussels will meanwhile stay at the highest security threat level for another week over fears of an imminent terror attack, the Belgian government said.
"The heightened geopolitical threat from the Russian jet being downed by Turkey, while Brussels remains in lockdown, is sending people into safe havens like the yen and gold and out of travel-sensitive stocks," said Jasper Lawler, an analyst with traders CMC Markets.
"The rebound in the oil price is also a negative for fuel prices for airlines," he told AFP.
At about 1130 GMT, London's benchmark FTSE 100 index and Frankfurt's DAX 30 were both down by 1.0 percent.
In Paris, the CAC 40 index was losing 1.6 percent compared with Monday's close, while Madrid shed 1.7 percent and Milan gave up 1.3 percent.
In foreign exchange, the euro stood at $1.0645 as it extended its recovery from seven-month lows of under $1.06 on Monday.
On Tuesday, authorities in Belgium and France were hunting for Belgian-born Salah Abdeslam, a key suspect in the Paris attacks on November 13, when gunmen and suicide bombers killed at least 130 people.
The United States issued a worldwide travel alert on Monday warning American citizens of "increased terrorist threats" in the wake of the Paris attacks.
Meanwhile "the shooting down of a Russian jet by Turkish forces, appears to have spooked the markets, with the European indices sharply widening their losses", noted Connor Campbell, financial analyst at Spreadex.
The incident is the first time a Russian military plane has been downed since Moscow began a bombing campaign on September 30 at the request of its long-standing ally Syrian President Bashar al-Assad.
Moscow's intervention in Syria has strained its relations with Turkey -- a fierce opponent of Assad -- with Ankara summoning Russia's ambassador last week after Moscow's warplanes bombed Syrian territory "very close" to the Turkish border.
Tuesday's developments sent shares sliding. In London, Easyjet slumped 3.4 percent and British Airways' parent IAG lost 3.8 percent.
Elsewhere Tuesday, shares in German airline Lufthansa shed 3.0 percent and in Paris, French hotels group Accor slumped by 4.6 percent in value compared with Monday's close.
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