Shares in major cruise ship operators plunged on Thursday, with five New York-listed companies losing $9.85bn in market value after US President Donald Trump announced sweeping global tariffs.
The stock market havoc affected passenger shipping shares even though tariffs would have little direct impact on the sector.
But cruise equities are sensitive to economic sentiment, which took a blow when Trump announced that imports from countries around the world would face tariffs of 10% to 50%.
Carnival Corp’s shares were down 11.4% in early afternoon trading on Thursday, falling to $17.75. With 1.17bn in shares outstanding, that means the world’s largest cruise ship operator lost $2.66bn in market capitalisation in less than a day.
Norwegian Cruise Line Holdings saw the biggest percentage plunge in the sector, losing 13.26% to hit $16.92. That represents $1.14bn in lost market cap.
Royal Caribbean Group, the second-largest cruise operator in the world in terms of fleet size, shed 8.9% to reach $193.21 in afternoon trading.
But the cruise giant is more valuable than larger rival Carnival, and the loss represented a $5.07bn plunge in market cap.
Smaller Viking Holdings plunged 7.1% to $38.99 on Thursday, while Lindblad Expeditions lost 8.9% to reach $8.72 on the Nasdaq.
The tariffs unveiled by Trump on Wednesday were more extensive than expected, leading to fears that the US economy could take a hit.
UBS economist Jonathan Pingle said the tariffs could pose a “large headwind” that could substantially lower growth and raise prices.
“The economic impact will depend on whether these tariffs are put in place, how long they remain in place and whether they are reduced through negotiation,” he wrote in a note to investment banking clients.
“However, the sheer magnitude of what is being proposed suggests substantial downside risk to the economic expansion, in our view. This could do some economic damage in the coming quarters.”(Copyright)
