By Kit Rees and Alistair Smout
LONDON (Reuters) - UK shares retreated on Tuesday, with the British travel sector down again after signs that armed attacks in France and Mali were dampnening customer demand.
British travel and leisure stocks were hit after data from ForwardKeys showed that new flight bookings to Paris, one of the world's most visited cities, have fallen by over a quarter in the week following the Nov. 13 attacks that killed 130 people.
The FTSE 350 travel and leisure index (FTNMX5750) was down 1.2 percent, set to fall for a third straight trading session.
With an eye to the attacks, the U.S. State Department issued a global travel alert for Americans planning to go abroad, while the downing of a Russian-made warplane near the Syrian border by Turkish fighter jets added to global tensions.
"There's a bit of geopolitical concern out there at the moment – we've had a couple of incidents last week, and now today our screens are filled with pictures of this Russian jet being shot down over Syria by Turkey," Jasper Lawler, market analyst at CMC Markets, said, adding that this was dragging on travel-sensitive areas of the stock market in particular.
Budget airline carrier easyJet (L:EZJ) fell 3 percent, while International Consolidated Airlines Group (L:ICAG) was down 3.3 percent.
Intercontinental Hotels Group (L:IHG) declined 2.6 percent, and tourism company TUI (L:TUIT) retreated 2.6 percent.
Luxury firm Burberry (L:BRBY) fell 3.3 percent after Nomura downgraded the stock to "neutral" from "buy".
"Macroeconomic trends remain mixed for the luxury sector, and we believe consensus expectations may be too high for (2016), thus there is a risk of a sector de-rating," analysts at Nomura said in a note.
Education publisher Pearson (L:PSON) fell 1.4 percent after Berenberg analysts cut their price target on the stock, saying that it was more likely that the dividend would need to be reset.
The FTSE 100 index (FTSE) was down 0.9 percent at 6,246.79 points at 1148 GMT, extending the previous session's losses.
Firmly in positive territory was engineering support services company Babcock International Group (L:BAB), up 3.5 percent after the company reported a rise in first half revenue and said that it was on track to meet its full-year expectations.
Likewise product testing firm Intertek Group (L:ITRK) rose 1.7 percent on the back of a set of positive company results, beating revenue forecasts and reaffirming its full-year target.