ADRs in Focus: Emerging markets airlines sink

U.S.-traded shares of airlines based in emerging markets fell sharply with the broader ADR market on Wednesday, as oil prices surged past $133 a barrel and showed no signs of easing.

The Bank of New York Emerging Markets ADR Index _ which includes shares of companies based in China, Mexico, Brazil and elsewhere _ fell 3.27 points to 386.42.

On the New York Mercantile Exchange, light sweet crude July delivery rose $4.19 to settle at $133.17 a barrel, but prices surged as high as $133.82 in after-hours electronic trading.

Prices were pushed higher in part by a report from the U.S. Energy Department that crude inventories fell by more than 5 million barrels last week. Analysts had expected inventories to rise.

Shares of airlines based in emerging markets took a beating following the spike in oil prices. Airline shares often trade opposite the price of oil because fuel represents one of the industry's biggest costs.

China Eastern Airlines Corp. fell $2.28, or 5.1 percent, to $42.19. Brazil's GOL Linhas Aereas Inteligentes lost 77 cents, or 4.9 percent, to $15.12. China Southern Airline Co. gave up $1.31, or 4.3 percent, to $29.17.

Brazil's TAM SA declined $1.01, or 4.7 percent, to $20.62. Chile's LAN Airlines SA fell 53 cents, or 4.5 percent, to $11.25.

The losses mirrored a similar downturn in shares of U.S. airlines. The Amex Airline Index, a basket of U.S. airline stocks, plunged 2.21 points, or 10.4 percent, to 19.03.

The Bank of New York Composite ADR Index lost 1.81 points, or 0.97 percent, to 184.82.