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LONDON (Alliance News) - Stocks in Europe closed lower Tuesday as Russian President Vladimir Putin accused Turkey of stabbing Russia in the back after its air force shot down a Russian fighter plane near the border with Syria.

"Today's loss is linked with a stab in our back delivered by terrorism accomplices," Putin said during a meeting in Sochi with Jordan's King Abdullah to discuss the crisis in Syria and efforts against the Islamic State extremists.

"We will certainly carefully analyse what has happened and today's tragic event will have serious consequences to Russian-Turkish relations," the Russian leader said.

The Russian military said that the Sukhoi Su-24 bomber was over Syrian territory at all points during its mission. Turkey said that the jet was fired upon after violating Turkish airspace and ignoring repeated warnings.

"It's in these kinds of scenarios that investors turn into wannabe military strategists and start war-gaming all the cataclysmic scenarios that could unfold. Military implications aside, Russia's economic malaise is already weighing on global demand and a spat with a NATO member like Turkey could make matters worse," summarised CMC Markets analyst Jasper Lawler.

At the market close in Washington US President Barack Obama and French President François Hollande were set to host a joint press conference in relation to the heightened global terrorist threat.

Airline stocks were hit by the heightened geopolitical tensions and the world wide travel alert issued by the US government on Monday, due to increased terrorist threats.

Current information suggests that Islamic State, al-Qaeda, Boko Haram, and other terrorist groups continue to plan terrorist attacks in multiple regions, the State Department said. These attacks may employ a wide variety of tactics, using conventional and non-conventional weapons and targeting both official and private interests, it said. The travel alert expires on February 24, 2016.

International Consolidated Airlines Group closed down 3.5%, easyJet ended down 3.3%, and BBA Aviation closed down 8.0%.

In addition, easyJet said it has cancelled all flights to and from Sharm El Sheikh in Egypt until January 6, while IAG's British Airways also has cancelled flights to and from that airport.

In London, the FTSE 100 index closed down 0.5% at 6,277.23 points, the FTSE 250 ended down 0.9% at 16,949.97 and the AIM All-Share fell 0.3% at 728.19. European stock indices ended lower as well, the CAC 40 and the DAX 30 both ended down 1.4%.

On Wall Street at the London close, the DJIA was trading slightly lower, the S&P 500 was down 0.2% and the Nasdaq Composite was down 0.4%.

Economic activity in the US increased by more than previously estimated in the third quarter, according to a report released by the Commerce Department. The report said real gross domestic product climbed by 2.1% year-on-year in the third quarter compared to the first estimate 1.5% increase. The upward revision came in just ahead of economist forecasts for a 2.0% rise.

The Commerce Department said the stronger than previously estimated growth primarily reflected an upward revision to private inventory investment.

However, a separate report by the Conference Board showed an unexpected deterioration in US consumer confidence in November.

The Conference Board said its consumer confidence index tumbled to 90.4 in November from an upwardly revised 99.1 in October. The steep drop came as a surprise to economists, who had expected the index to climb to 99.6 from the 97.6 originally reported for the previous month.

The dollar was mixed against other major currencies following the data releases. At the London close, the pound traded the greenback at USD1.5057 and the euro traded at USD1.0637.

Resource stocks helped London pare some losses as commodity prices continued to bounce. At the London close, gold was quoted at USD1,074.84 an ounce and Brent oil was at USD46.15 a barrel.

Multi-commodities miner and trading house Glencore closed as the best performer in the FTSE 100, up 3.9%, while gold miner Randgold Resources closed up 2.9% and Royal Dutch Shell 'A' shares ended up 1.5%.

Babcock Resources was also one of the best performers in the FTSE 100, up 3.0%. The engineering support services company said its pretax profit and revenue both improved in its first half thanks to a robust performance in its marine and technology division.

Babcock said its pretax profit for the half to the end of September was GBP146.3 million, up from GBP137.0 million a year earlier. Revenue for the period rose to GBP2.35 billion from GBP2.10 billion. Revenue growth was robust in its marine and technology business, with good trading in its defence and commercial markets, which offset a tougher environment for its defence and security arm, which was hit by aircraft deliveries phasing effects and by some major contracts coming to a close.

Testing, inspection and certification services company Intertek Group, also rose 3.0% as it said it remains on track to meet its expectations for the full year, despite revenue growth slowing in the second half so far.

Intertek said revenue for the ten months to the end of October rose to GBP1.78 billion, up 2.8% year-on-year, though revenue for the four months to the end of October was up only 1.7% on a reported basis. On an organic basis at constant currency, however, Intertek's revenue growth for the first ten months was only 1.2%, but rose 1.8% in the four months to the end of October, indicating improved underlying trading.

Burberry Group ended down 3.7%, the worst performer in the FTSE 100, after Nomura downgraded the luxury fashion retailer to Neutral from Buy. Nomura said management expectations for a return to mid-single-digit percentage growth in comparable sales for the second half appear a stretched target given the macroeconomic backdrop of weak US demand and mixed Asia.

In the FTSE 250, NMC Health closed as the best performer, up 6.1%. The United Arab Emirates-focused healthcare provider said it has struck a USD189.0 million deal to acquire a 51% stake in Fakih IVF Group.

NMC said it has also struck an agreement to increase its stake in Dubai-based Fakih over time, conditional on certain conditions being met. NMC said the deal will strengthen its maternity and fertility business and give it an established presence and referral centres across different geographies. The cash required will come from existing cash and credit facilities, it said.

On the other side of the index, AO World closed down 14%, the biggest midcap faller. The online domestic appliance retailer reported that it swung to a loss in the first half as it invested in its German operations, booked start-up costs in other parts of Europe and revealed plans to launch in the Netherlands.

AO World said it made a GBP8.0 million pretax loss in the six months ended September 30, compared with a pretax profit of about GBP800,000 in the corresponding half the prior year. Revenue rose by 22% to GBP264.3 million.

In the economic calendar, there is still the release of the Bank of Japan's monetary policy meeting minutes at 2350 GMT. On Wednesday, the British Bankers' Association's mortgage approvals are at 0930 GMT and US Mortgage Bankers Association's mortgage applications are at 1200 GMT. The UK Autumn Statement and Comprehensive Spending Review will be delivered by UK Chancellor George Osborne at 1230 GMT.

In the US, personal income, spending and consumption data are at 1330 GMT alongside durable goods data. The Federal Housing Finance Agency's housing price index is at 1400 GMT, flash Markit services and composite purchasing managers' index readings are at 1445 GMT, new home sales at 1500 GMT and the Energy Information Administration's crude oil stocks at 1530 BST.

In the UK earnings calendar, FTSE 100-listed water company United Utilities reports half-year results, while soft drinks bottling company Coca-Cola HBC reports third quarter results. FTSE 250-listed soft drinks maker Britvic releases full-year results, as does Daily Mail and General Trust, while plastic products company RPC Group and bookmaker Betfair Group release interim results.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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