Brussels terror attack weighs on markets
by Agency Staff,
2016-03-23 05:35:51.0
BRUSSELS — European shares fell on Tuesday with travel and leisure stocks leading the market lower after co-ordinated attacks at Brussels airport and in the city’s metro system killed at least 35 people and injured more than 230, deepening a sense of crisis across the continent.
Suicide bombers blew themselves up at the airport and a further blast tore through a rush-hour metro train station a short distance from the European Union’s headquarters. "Geopolitical risk, including acts of terrorism which directly affect trade or movement, remains a significant risk factor to monitor," said Lorne Baring, MD of B Capital Wealth Management in Geneva.
"In a period where there is suboptimal growth both in Europe and globally, combined with equity valuations that are no longer cheap, there exists an environment which is susceptible to shocks that can act as a trigger for falls in asset prices."
The STOXX Europe 600 Travel and Leisure index fell 2.1%, the top sectoral decliner, with shares in easyJet, Ryanair, Accor, TUI and IAG down 1.8% to 4%.
US stocks fluctuated soon after the open on Tuesday as investors dived into haven assets such as Treasuries and gold.
The incidents, which follow terror attacks in Paris in November last year and a suicide bombing in Istanbul at the weekend, may add to security concerns in Europe as officials attempt to bring an influx of migrants under control.
Terrorist incidents including the one in the French capital and London bombings in 2005, spurred equity sell-offs that were erased in the following days and weeks. "The market appears to be more resilient than you’d expect after a terrorist attack," said Michael Antonelli, an institutional equity sales trader and MD at Robert W. Baird.
"We’re still in the negative, but I’m shocked we are not down more," he said.
Last night, Belgium was on the highest terror alert level amid fears that further assaults are in the works. "We will act with all our force to defend ourselves," Prime Minister Charles Michel told reporters, adding that the country would observe three days of mourning. "Our freedom was hit in the heart this morning in Brussels, as it was several months ago in Paris. It’s a common battle, a battle without borders."
The Islamic State group officially claimed responsibility.
"Soldiers of the caliphate … carried out an attack targeting the crusader state of Belgium, which is fighting Islam and its people," the group said in a statement it posted online on Tuesday.
The bombs exposed the limitations of police and intelligence work even in an European capital already on high alert for terrorism. There have been long-standing failures to penetrate groups of Islamic extremists living in the Belgian capital.
"You’re dealing with a very big problem that has quite strong roots in this country, and that the Belgians are having difficulty dealing with," said Raffaelo Pantucci, director of international security studies at London’s Royal United Services Institute.
Even with suspected extremists under tight watch, "you don’t know that you’re not just looking at a partial piece of the picture," Mr Pantucci said.
Reuters, Bloomberg, AFP
Police officers patrol outside the Maelbeek metro in Brussels on Tuesday. Picture: AFP PHOTO/PHILIPPE HUGUEN
BRUSSELS — European shares fell on Tuesday with travel and leisure stocks leading the market lower after co-ordinated attacks at Brussels airport and in the city’s metro system killed at least 35 people and injured more than 230, deepening a sense of crisis across the continent.
Suicide bombers blew themselves up at the airport and a further blast tore through a rush-hour metro train station a short distance from the European Union’s headquarters. "Geopolitical risk, including acts of terrorism which directly affect trade or movement, remains a significant risk factor to monitor," said Lorne Baring, MD of B Capital Wealth Management in Geneva.
"In a period where there is suboptimal growth both in Europe and globally, combined with equity valuations that are no longer cheap, there exists an environment which is susceptible to shocks that can act as a trigger for falls in asset prices."
The STOXX Europe 600 Travel and Leisure index fell 2.1%, the top sectoral decliner, with shares in easyJet, Ryanair, Accor, TUI and IAG down 1.8% to 4%.
US stocks fluctuated soon after the open on Tuesday as investors dived into haven assets such as Treasuries and gold.
The incidents, which follow terror attacks in Paris in November last year and a suicide bombing in Istanbul at the weekend, may add to security concerns in Europe as officials attempt to bring an influx of migrants under control.
Terrorist incidents including the one in the French capital and London bombings in 2005, spurred equity sell-offs that were erased in the following days and weeks. "The market appears to be more resilient than you’d expect after a terrorist attack," said Michael Antonelli, an institutional equity sales trader and MD at Robert W. Baird.
"We’re still in the negative, but I’m shocked we are not down more," he said.
Last night, Belgium was on the highest terror alert level amid fears that further assaults are in the works. "We will act with all our force to defend ourselves," Prime Minister Charles Michel told reporters, adding that the country would observe three days of mourning. "Our freedom was hit in the heart this morning in Brussels, as it was several months ago in Paris. It’s a common battle, a battle without borders."
The Islamic State group officially claimed responsibility.
"Soldiers of the caliphate … carried out an attack targeting the crusader state of Belgium, which is fighting Islam and its people," the group said in a statement it posted online on Tuesday.
The bombs exposed the limitations of police and intelligence work even in an European capital already on high alert for terrorism. There have been long-standing failures to penetrate groups of Islamic extremists living in the Belgian capital.
"You’re dealing with a very big problem that has quite strong roots in this country, and that the Belgians are having difficulty dealing with," said Raffaelo Pantucci, director of international security studies at London’s Royal United Services Institute.
Even with suspected extremists under tight watch, "you don’t know that you’re not just looking at a partial piece of the picture," Mr Pantucci said.
Reuters, Bloomberg, AFP
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