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Paris attacks drag ‘vulnerable’ global stocks down
November 16, 2015, 6:47 am

Transportation resumed in Paris on Monday as stock markets were set to reopen [Xinhua]

Transportation resumed in Paris on Monday as stock markets were set to reopen [Xinhua]


Global stocks are likely to be dragged down in the aftermath of the deadly attacks in Paris, analysts are warning, in line with the kneejerk market reactions that usually follow terrorist violence.

European stocks are expected to tumble 2 per cent Monday continuing a downward streak that began on Friday amid speculation about a US Federal Reserve rate hike in December.

The euro was already down before European markets opened registering 1.07 to the dollar as fears increased over slower tourism following the attacks on Paris – a major traveler’s destination – in the interim.

Asian stocks, which were already down on Friday trading on continuing fears of China’s slowdown, kicked off the week markably lower.

China’s benchmark Shanghai Composite Index was trading down at 0.22 per cent at press time, while the Hang Seng Index suffered -1.65 per cent at press time.

Japan’s Nikkei was down 1 per cent in early trading as both Australia’s ASX and South Korea’s Kospi dropped 0.8 and 1 per cent, respectively.

Japan is currently in a technical recession, adding further pressure on markets.

The terrorist attacks in Paris, which killed at least 132 people and injured more than 350, are likely to batter European stocks, which had already closed down by 2.7 per cent last week.

The European slump on Monday will likely be led by London’s FTSE – already at a six-week low last week. It could shed as much as 100 points, or about 1.5 per cent, in early Monday trading.

Although major transportation will reopen in France on Monday, there are fears that a drop in French tourism could pull down the already struggling eurozone economy as fears continue that attacks could occur elsewhere in Europe. Tourism accounts for 7.5 per cent of GDP growth in France.

France’s CAC 40 was already down 1 per cent on Friday close.

Hardest hit so far in Monday trading are Middle Eastern markets. Egypt’s EGX fell 4.0 per cent, already affected by the crash of the Russian Metrojet airliner in Sinai two weeks ago.

Saudi Arabia’s markets also witnessed increased sell-off with stocks there plummeting 3 per cent.

The BRICS Post with inputs from Agencies