Europe is on high alert less than a year after the Charlie Hebdo massacre.
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Against expectations, European stock markets opened up higher, with even France’s own CAC 40 bouncing up after a fall in early morning trading.
Among outstanding losers, Sonova fell 7.5 per cent as the hearing aid maker cut its sales and profit forecasts after weak cochlear implant sales, sluggish business with US veterans and a squeeze on overseas earnings from the strong Swiss franc. Changes in futures aren’t necessarily reflected in market moves after the opening bell.
French shares slightly underperformed as markets opened for the first time since the co-ordinated attacks on Friday evening in Paris by Islamist militants.
Still, the impact on markets and the economy from previous attacks in Madrid (2004) and London (2005) faded quickly.
Still, analysts judged the reaction to the heightened worries stemming from the attacks in Paris has been rather muted, with investors likely to focus on increasing central bank divergence between the European Central Bank (ECB) and the Federal Reserve in due course.
Asian stocks fell to six-week lows on Monday and emerging market currencies wilted as investors sought the safety of the greenback in the wake of Friday’s deadly attacks in Paris and downbeat economic data.
“The risk premium will rise as no one knows whether any other terror attacks may happen”, said Cedric Ma, a Hong Kong-based senior investment strategist at Convoy Asset Management, which oversees about $500 million.
Losses for equity punters translated into gains for bond investors. Ten-year German yields, the benchmark for euro zone borrowing costs, fell 1.2 basis points to 0.55 percent. Brent crude, which is used to price worldwide oils, was up 31 cents at $44.78 a barrel.
ENERGY: US crude added 19 cents to $40.93 a barrel.
The single currency was last down 0.5 percent at $1.0725, having hit $1.0674 last week on expectations the European Central Bank will step up quantitative easing (QE).
In China, mainland stock markets are typically affected by government policies rather than the economy.
A few of the biggest French companies trade on the Euronext Paris exchange, including Air France, LVMH, AXA, BNP Paribas, Societe Generale, L’Oreal, Carrefour, and Total. Aeroports de Paris SA was down 3.5%, while Deutsche Lufthansa AG and British Airways parent worldwide Consolidated Airlines Group PLC were down 2.3% and 2.8%, respectively. Oil and gas giants also lifted up the United Kingdom stocks. Asian markets ended lower, with the Nikkei 225 down 1% and the Hang Seng 1.7% lower. On Friday, the UK’s FTSE 100 closed at 1.03 percent, a six-week low, and Wall Street had its worst week since August.
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However despite the recovery from early falls today, holiday companies continue to bear the brunt of the selling, with concerns about the effect of the terror attacks on consumers’ travel and leisure plans.
