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Chinese airline stocks fall heavily, Skymark may order nine more A380s

Analysis

Chinese airlines led the region sharply lower on Friday on concerns the central bank could move again to curb rising inflation.

Summary
  • Chinese airlines experienced a sharp decline in stock prices due to concerns about inflation and potential monetary policy tightening.
  • The Shanghai Composite Index fell by 5.2%, the largest drop in 14 months.
  • Sensitive sectors like airlines were particularly affected, with Shandong Airlines and Hainan Airlines experiencing significant losses.
  • Skymark announced plans to order nine additional A380s, adding to the four already agreed upon with Airbus.
  • Qantas confirmed that its A380 fleet would remain grounded for at least another 48 hours.
  • Thai Airways reported a worse-than-expected net profit for the third quarter, leading to a drop in its stock price.

The benchmark Shanghai Composite Index slumped 5.2% - its biggest one-day fall in 14 months - as China's consumer price index rose by 4.4% in Oct-2010, stoking expectations of another tightening of monetary policy, which could dampen demand. Sensitive sectors such as airlines were hard hit. Shandong Airlines shed 10% and Hainan Airlines 8.3%, while the "big three" state-owned carriers all slumped around 5%.

Skymark fell 1% as the airline stated it plans to order nine more A380s, in addition to an MoU for four A380s signed with Airbus in Friday.

Qantas slipped 2.4% as the carrier confirmed its A380 fleet would remain grounded for at least a further 48 hours. Thai Airways dropped 2.1% as it revealed a worse-than-expected third-quarter net profit.

Asia Pacific selected airlines daily share price movements (% change): 12-Nov-2010

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