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As police build picture of attackers..

Markets hope for only short term impact from Paris killings

BataclanMarkets will open lower today with tourism and travel related stockslikely to be among the hardest hit. France is the biggest tourist destination in the world and the industry accounts for 7.5% of GDP.

However, traders point to how stocks have recovered quickly following similar attacks. The bombings that killed 191 people on Madrid commuter trains in March 2004 and left more than 50 dead in London in July 2005, prompted sell-offs in equities that were reversed soon afterwards.

London stocks fell 1.4% on the day of the bombings, but the FTSE 100 recovered its losses the following day. Spain’s IBEX 35 Index declined 2.2% on 11 March, 2004, but this was made up by the end of the month.

The Indonesian stock market plummeted by 10% after the 2002 bombing of a nightclub in Bali. The Jakarta Stock Price Index rebounded 5.9% in the following week and had recovered its losses in less than a month.

Looking ahead to Monday’s opening, Yogi Dewan, chief executive officer of Hassium Asset Management in London, told Bloomberg: “Wouldn’t be surprised to see markets down 2 percent to 3 percent, maybe even more. Sectors will be impacted in Europe such as insurance, travel and leisure. High oil prices for a significant period will also impact on an already fragile global growth story.”

The euro may fall, while German bonds and US Treasuries – a destination for traders following earlier terror attacks – are likely to rise, Dewan said.

Nervousness over foreign travel was already evident following the suspected bomb attack on a Russian plane over Egypt. Like the Paris attacks this was also linked to the Syrian conflict.

Francois HollandeEuropean markets ended last week in a subdued mood on the back of slowing growth and this is likely to weigh on stocks as much as the terror-related incidents.

There was some after-market selling following Friday’s Paris attack but as Eiji Kinouchi, chief technical analyst at Daiwa Securities in Tokyo told Reuters: “If this had happened during market trading hours there could have been a panic. Markets had a weekend to digest all the information.”

As a search continued to identify those responsible, President Francois Hollande (above)  said in a televised address Saturday: “It was an act of war that was prepared and organised abroad, with complicity” from individuals in France.”

Latest developments in the Paris attack:

  • Video footage at the Bataclan concert, where the death toll is now 89, shows the moment when gunfire could heard and members of the US and Eagles of Death Metal sought cover. Graphic designer Sebastien Snow was filming the gig on his mobile phone when the shooting started and posted it to Instagram. The band managed to escape via a backstage door and ran to a police station. Sky footage here http://news.sky.com/story/1587994/video-bataclan-gunshots-panic-and-horror
  • A severed finger at the site of the Bataclan theatre reportedly led French authorities to identify the first of the seven terrorists.  According to The Guardian multiple sources have identified to French media one killer as Omar Ismaïl Mostefai, a 29-year-old of Algerian origin. He was one of three gunmen to storm the Bataclan theatre.He had been convicted of eight crimes between 2004 and 2010, but was never jailed. He was flagged as a radicalisation risk by French intelligence in 2010, Paris prosecutor Francois Molins said on Saturday. His brother and father have been taken into police custody and had their homes searched.
  • A Syrian passport, belonging to a man born in 1990 who was not known to the French authorities, was found lying close to the bodies of two jihadis, according to The Guardian. A second gunman was also found with a passport of a Syrian man born in 1980. He had also not previously been known to French police, but the back story for both men suggested a possible Isis connection. One had been registered in Greece as a refugee; the other appeared to have travelled through the Greek island of Leros.

 

 

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