LONDON, Aug 10 (Reuters) - European shares dropped 1 percent on Thursday after British police said they had thwarted a plot to blow up aircraft in mid-flight and as Wall Street tumbled late in the session on worries over slowing growth.
Sterling slipped on news of the plot before recovering. Britain raised its security threat level to "critical", which means it expects an attack imminently.
British Airways fell 3.5 percent. It said it had banned all hand luggage from planes leaving the UK, on government advice, and that no items such as laptops or mobile phones would be allowed in its cabins.
Ryanair fell 3 percent and Lufthansa slipped 2.3 percent. U.S. airlines had also fallen overnight on worries about a slowdown in demand, against a backdrop of rising fuel costs.
By 0712 GMT, the FTSEurofirst 300 <.FTEU3> index of leading European shares had shed 1.1 percent to 1,326.23. Britain's FTSE 100 <.FTSE> lost 1.1 percent to 5,794 points.
"This sort of news has a very negative influence on markets, investors are certainly going to be hesitant and cautious. Any terrorist threat is not good for the likes of British Airways," said Ian Griffiths, trader at CMC Markets.
In other news, Deutsche Telekom shares almost 10 percent after second-quarter core earnings fell 7.2 percent, missing analysts' expectations.
DOW Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)