European shares were steady on Monday, supported by gains in the energy sector that helped offset a slump in travel stocks following Friday’s attacks in Paris that killed at least 129 people.
Advertisement
In currency markets, the euro hit a 6 1/2-month low against the safe-haven yen, and close to that mark versus the dollar, before recovering somewhat.
French President Francois Hollande has declared a state of emergency, ordering police and troops into the streets, and set three days of official mourning after the attacks he called an “act of war” by the Islamic State. But analysts say the January attack was more contained, whereas November 13 was an attack of unprecedented scale.
Shoppers in Britain’s main cities collected in public squares to reflect on Friday’s events while offices and shops across the country fell silent. Hong Kong’s Hang Seng fell 1.7 percent.
The benchmark Saudi index, or Tadawul, shed nearly 3% to its lowest level since the first trading day of 2013.
“At this juncture, it is easy to see that the Fed’s intentions to “normalise” monetary policy could be derailed by a combination of adverse domestic economic and external events”, said Neil MacKinnon, global macro strategist at VTB Capital. Shares of travel-booking sites Expedia and Priceline Group fell 3% and 4.2%, respectively.
French financial markets are to open as usual today, stock and derivatives exchange Euronext said on Saturday.
The Egyptian, UAE, Bahrain, Oman and Kuwaiti markets on Sunday.
Yogi Dewan, the chief executive of Hassium Asset Management, also predicted that shares would fall sharply.
Experts said investors could anticipate turbulence in insurance, travel and leisure sectors as well.
“It is obviously likely to significantly hit the Paris economy in the near term, and there could also be a knock-on effect elsewhere in France”, said Howard Archer of IHS Global Insight.
As authorities in France and Belgium continue to identify and arrest suspects in the attacks, a few markets are proving more resilient. The report officially puts Japan back into recession. The United Kingdom, Spain and France itself has all seen its economies little damaged by terrorist atrocities in the past.
At the west London residence of Sylvie Bermann, Philip Hammond wrote in a book of condolence: “For the second time this year I offer my condolences to the French people and the family and friends of all those who have lost their lives. And that is the best way of putting up two fingers to the terrorists”.
Advertisement
“I sincerely hope these attacks would prove short in duration and would abate in intensity, in which case the market reaction is likely to only include a brief safety bid in Treasuries”, LeBas said.
