World Economy

Europe Stocks Plummet After Barcelona Attacks

Pan-European stocks were down on Friday following falls in Asian and US stocks overnight.Pan-European stocks were down on Friday following falls in Asian and US stocks overnight.

European stocks continued to trade deep into the red on Friday as investors reacted to Spain's worst terror attack in more than 13 years. The pan-European Stoxx 600 was down 0.75% during early afternoon deals with all sectors and major bourses in negative territory.

In Madrid, the IBEX 35 dropped 1.1% to 10,327, and had fallen by as much as 1.7% in early trade, as all but two components were lower. The Stoxx Europe 600 index fell 1% to 3763.30.

European travel stocks also fell sharply in early trading on Friday after a deadly attack in tourist hotspot Barcelona, with investors also increasingly concerned the Trump administration was fraying at the seams.

As a global sell-off spread, the pan-European STOXX 600 was down 0.9%, with blue-chips down 1%, following falls in Asian and US stocks overnight. All European sectors were in the red, Reuters reported.

Travel and leisure stocks led losses, down 1.4%, with airlines the worst-performing as investors dropped stocks exposed to tourist flows. Easyjet, Ryanair, British Airways owner IAG and Lufthansa were down 1.9 to 2.7%.

Spanish airport company AENA fell 2% after Thursday's attack, in which a suspected Islamist militant drove a van into crowds in central Barcelona, killing 13 people. Spanish stocks underperformed peers, falling 1.4%, with Melia Hotels among top weights.

"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, analyst at ETX Capital.

The risk-off moves also hit banks, down 1%, with Deutsche Bank and BNP Paribas among the worst performers. Though company news was thin on the ground, earnings drove some moves.

Dutch storage firm Vopak fell 4.5% after it said profit would be 5 to 10% lower this year than last due to lower occupancy rates.

Irish construction firm Kingspan Group jumped 7%, the top gainer after it reported its trading profit grew 6% in the first half and said the Brexit vote had not had a measurable impact on UK business.

Fiat Chrysler fell 1.3% after Guangzhou Automobile denied it was planning to take over the Italian carmaker. Speculation over a potential Chinese buyer had sent its shares soaring this week.

Some stocks with the biggest results-driven losses in the previous session recovered ground: Vestas Wind and Wienerberger gained 2.8 and 3.8%. Meanwhile Straumann, the top gainer on Thursday after a profit beat, fell back 3.5% as investors moderated their enthusiasm.

The European earnings season is drawing to a close, with 86% of second-quarter company reports through. Some 60% of these have beaten or met expectations and earnings estimates were trending up, though they were still negative overall after being revised down sharply since the start of earnings season due to concerns about a stronger euro.


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