Stock markets shrug off Paris attacks as travel stocks fall

Shares in Europe's travel and tourism companies suffered heavy falls on Monday as investors worried about the impact of the Paris attacks.

Airlines were among the big fallers, with Air France and British Airways owner IAG down 5% and 3% respectively. French hotel group Accor lost 5%.

Stock markets in the US, London and Frankfurt all closed up after recovering from early falls.

But in Paris the Cac 40 index finished down 0.08%.

The price of gold rose 1% as investors sought the safety of traditional havens.

On Wall Street, all of the three main indexes eventually ended the day over 1% higher.

"Markets are slowly becoming more and more immune to these types of events," said ohn Brady, managing director at R.J.O'Brien & Associates.

'Sign of resilience'

Many analysts had forecast that travel and leisure shares would be the big losers on Monday as markets got their first chance to react to Friday's attacks.

Eurotunnel Group, operator of the Channel Tunnel rail link, fell 3%. Aeroports de Paris, the operator of Paris' Charles de Gaulle and Orly airports, was almost 4% lower, while LVMH and Gucci-owner Kering fell nearly 1%.

Budget airline Easyjet fell about 3% in early trading, but closed 0.39% down. Ryanair also fell around 3% in the morning, and closed 1.43% lower.

"In a sign of resilience, there is no sign of the panicked trading that could have been justifiably expected from the European indices," noted Spreadex trader Connor Campbell.

The tourism sector accounts for about 7.5% of French GDP.

"These Paris terrorist attacks and the larger scale of this attack could have a meaningful negative impact on the travel and tourism sector," Robert T Lutts, president and chief investment officer at Cabot Wealth Management, told the Reuters news agency.

"It is possible this could cause investors to take a bit more cautious stance on the higher-risk sectors of the markets."

Hidenori Suezawa, financial market and fiscal analyst at SMBC Nikko Securities, added: "Given that France has a big tourism industry, there may be some damage to the economy if this leads to a fall in visitors to France, or in tourism in general after the crash of a Russian plane."

Oil prices rise

A decline in tourism in Europe could also weaken the euro, analysts warned. But the currency held relatively steady on Monday, and was up 0.019% against the dollar and down 0.55% against sterling.

French air strikes against IS bases in Syria led to concerns about oil supplies. The price of Brent crude was down 2% to $43.59 a barrel.

But many analysts believe the wider economic impact of the Paris shootings will be short-lived.

"As horrific as these events are - and this is truly awful - economic activity does tend to be pretty resilient. At the end of the day, people have to get on with their lives," said Howard Archer, an economist at IHS Global Insight.