Airline and travel stocks tumbled yesterday following deadly explosions at the airport and metro in Brussels, but overall European markets quickly shrugged off the attacks.
After initial falls of between 1.0 and 1.5% for Europe’s main indices as news of the explosions first filtered through, the region’s main stock markets rallied to finish the day with slight gains.
Even Brussels’s BEL 20 index climbed 0.2%.
In London, the FTSE 100 up 0.1% at 6,192.74 points; Frankfurt - DAX 30 up 0.4% at 9,990 points and Paris - CAC 40 up 0.09% at 4,431.97 points at the close yesterday.
The euro fell only modestly against the dollar, while haven assets gold and the yen gave up earlier gains.
“The sad reality is that the more frequent these kinds of events become, the more markets become immune and the response in prices becomes less dramatic,” said Jasper Lawler, analyst at trading group CMC Markets.
Around 35 people died after two blasts hit Brussels airport and one the city’s metro system.
“While travel stocks had their knee-jerk reaction sell-off and safe havens were bid (higher), relative calm has quickly returned,” said Mike van Dulken, head of research at Accendo Markets.
Sentiment was boosted later in the day by data showing that German investor sentiment had risen slightly this month.
Despite the overall recovery in the markets, travel-related stocks still ended the day in the red.
Shares in tourism groups Thomas Cook and TUI fell 4.3% and 2.8% respectively.
InterContinental Hotels Group shed 1.5% in London, while French hotels group Accor meanwhile tumbled 3.9%.
IAG, parent of British Airways and Iberia, fell 2.4% in value and Air France-KLM slumped 4.0%, and German airline Deutsche Lufthansa retreated 1.3%.
“The explosions are bad news for airlines which have just started to see passenger demand pick up again after a slump in the wake of multiple terrorist incidents at the end of last year, including the attack on Paris,” said Lawler.
“The response from authorities is likely to be another extension of security controls which make travel even less attractive for tourists.”
However the share price of Securitas, Europe’s largest private security firm, jumped 3.7% in trading in Stockholm.
Outside of Europe, Wall Street also initially moved down on the news of the attacks, although trading was mixed by midday.
Airline and travel stocks also bore the brunt.
Delta Air Lines lost 1.9% and United Continental shed 0.8%.
Shares in hotel chain Hilton Worldwide slid 0.9%, and online travel companies Priceline and Expedia fell by 2.9% and 1.6%, respectively.
Margin trading, whereby investors only need to deposit a small proportion of the value of their trades, was behind a boom that sent the Shanghai bourse up 150% in 12 months, before it plummeted from last June after regulators moved to tighten rules on the practice.