Airline stocks drop after Spain attacks

Global financial markets are feeling the effects of the Spain terror attacks – with all of the major European indices trading down on Friday morning.

The FTSE 100 opened 0.6% down and had increased its losses to 1% by 10am, while the French CAC dropped by 1.2%Spain’s own IBEX index is down 1.1%.
Airlines have been particularly badly affected, as the fact that the attacks took place during the summer season in an area popular with tourists raises fears that the travel industry could see a downturn due to terrorism concerns.
EasyJet’s share price dropped sharply at the opening of the London stock exchange, but recovered slightly and is currently trading 2% lower compared to Thursday’s close.
International Airlines Group, the owner of British Airways, was down 1.8%.
And budget airline Ryanair’s share price fell overnight and was 2.8% lower on the Irish stock exchange on Friday morning.

Video: Timeline of Spain terror attacks

“As we’ve seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings,” said Neil Wilson of ETX Capital.
“Investors are concerned that demand will fall over the rest of the year, which was already looking like it would be a tough patch for the industry.”
The pound and euro currencies seemed more resilient and little changed as a result of the attacks.
Investors appeared to be taking refuge in gold, which is often seen as a solid investment in times of uncertainty. The commodity’s price rose to its highest levels in over two months on Friday.

Source: SKY

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