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LONDON (Alliance News) - UK stocks were trading lower Tuesday, with geopolitical risks heightened after a Russian fighter jet was shot down over the Turkish-Syrian border and travel stocks sold following a US travel warning.

The jet went down near the north-western Syrian Turkmen town of Bayirbucak. The Turkish military said the jet was given 10 warnings in five minutes before being shot down by its F16 military jets, according to Anadolu news agency.

"A warplane of unknown nationality that breached Turkish airspace over Hatay's Yayladagi region at 0920 [0720 GMT] was alerted 10 times in five minutes," it said in a statement quoted by Anadolu, adding that the response was in line with the country's rules of engagement.

Kremlin spokesman Dmitry Peskov said: "We have to be patient, it is a very serious incident, but again, without all of the information it is impossible to say anything and it would be wrong," according to state news agency TASS. He would not discuss the status of Russian Foreign Minister Sergei Lavrov's scheduled visit to Turkey this week.

NATO ambassadors were set Tuesday to meet in special session. Turkey is one of NATO's 28 member states. The special meeting is expected to start at 5 pm (1600 GMT), the Brussels-based military alliance said.

Connor Campbell, financial analyst at Spreadex said the incident appears to have spooked the stock market, with European indices adding to their losses.

At the midday stage in London, the FTSE 100 index was down 1.0% at 6,244.22 points, the FTSE 250 was down 1.1% at 16,917.71 and the AIM All-Share was down 0.2% at 729.21. In Paris, the CAC 40 index was down 1.5%, and in Frankfurt the DAX 30 was off 0.9%.

US futures were pointing to a soft open on Wall Street. The Dow 30 and S&P 500 were both indicated down 0.4% and the Nasdaq 100 was pointed down 0.5%.

UK-listed travel stocks were amongst the biggest fallers after the US government issued a worldwide travel alert for US citizens until February 24. The US State Department said, based on current information, ISIS, Boko Haram, Al-Qaeda and other terrorist groups are planning attack in multiple regions.

International Consolidated Airlines Group, was down 3.4%, easyJet down 3.2%, TUI Group down 2.5% and BBA Aviation down 7.1%.

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.

Elsewhere on the London market, engineering support services company Babcock International Group said its pretax profit and revenue both improved in the first half thanks to a robust performance in its marine and technology division.

The FTSE 100-listed company 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.

Babcock was the best blue-chip performer, up 3.4%.

Burberry Group traded down 3.1% 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.

Testing, inspection and certification services company Intertek Group, up 1.5%, 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.

In the FTSE 250, Circassia Pharmaceuticals was up 5.8%, making it the best performer in the index. The pharmaceuticals company said its fluticasone propionate pressurised metered dose inhaler (pMDI) generic equivalent of GlaxoSmithKline's FLIXOTIDE pMDI for the prophylactic treatment of asthma has received a stamp of approval from the UK's Medicines and Healthcare Products Regulatory Agency.

Approval means that the issue of a national licence will now begin. "Achieving this positive outcome is a major milestone for Circassia, marking the favourable conclusion of the company's first ever marketing authorisation application for a product using its particle-engineering technology," Chief Executive Steve Harris said in a statement.

AO World was down 8.4% after the online domestic appliance retailer reported 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.

On AIM, Kefi Mineral said it has raised GBP2.6 million via a share issue to back work on the Tulu Kapi gold project in Ethiopia.

The miner will issue 877.2 million shares at 0.3 pence per share to raise the funds. Shares in Kefi were up 13% at 0.34p on Tuesday. Prior to the issuance, Kefi's market capitalisation was just GBP6.2 million.

Chamberlin was down 14%. The castings and engineering company warned on its full-year outlook after its performance in the first half was hit by tough trading conditions and a hit from the weakness of the euro, which caused it to swing to a loss.

The company reported a pretax loss of GBP426,000 in the six months ended September 30, compared with a pretax profit of GBP279,000 in the corresponding half the prior year, as revenue fell to GBP18.0 million from GBP21.1 million.

"Looking ahead, given the current tough trading environment, the board expects underlying profitability for the current financial year to be below the GBP0.8 million achieved in the prior financial year," Chairman Keith Butler-Wheelhouse said.

UK interest rates are likely to remain low for some time, Bank of England Governor Mark Carney said at a UK Treasury Committee hearing.

"One of the concerns in a low prolonged interest rate environment, which we clearly are in, and are likely to remain for some time, even with limited and gradual rate increases - it still will be a relatively low interest rate environment," Carney said.

Chief economist Andy Haldane and external members Kristin Forbes and Gertjan Vlieghe also appeared in Parliament. Haldane observed more downside risks to both growth and inflation outlook.

Still ahead in the economic calendar, US GDP for the third-quarter is due at 1330 GMT, alongside US goods trade balance. Economists expect the second reading of US third-quarter GDP to show an annualised increase of 2.0%, up from the first estimate of 1.5%.

The US Redbook index is due at 1355 GMT, while US consumer confidence is expected at 1500 GMT.

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

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