Travel shares plunge on back of Spain terror attacks
Barcelona's deadly terror attacks sent tremors through travel stocks on Friday as a nervous City dumped shares in airlines, tour operators and hotels.
Islamists killed at least 13 people in a vehicle attack in the heart of the Catalan capital late yesterday, while further assaults were thwarted by Spanish police overnight.
The latest horrifying outbreak of terror on the European mainland, following three separate UK attacks this year, compounded mounting concerns over Donald Trump’s chaotic presidency.
In London, travel stocks bore the brunt of the sell-off as the FTSE 100 fell nearly 1%, or 63.45 points, 7324.42.
Airlines which fly to Barcelona were lower. British Airways and Iberia owner IAG dropped 14.8p, or 2.4%, to 609.6p and easyJet fell 26.9p, or 2.1%, to 1274p, making them the biggest fallers in the blue-chip index.
Thomson Holidays owner TUI sank 9.2p to 1321p and InterContinental Hotels lost 73p to 3915p as dealers also fretted over the wider impact on the hotels and tourism market.
Other stocks under pressure included Madame Tussauds and London Eye operator Merlin Entertainments, which shed 6.7p to 458.6p.
Thomas Cook sank to the bottom of the FTSE 250, giving up 243.1p, to 122p, or 2%.
ETX Capital’s Neil Wilson said: “As we’ve seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings.
“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.
“Airlines are already dealing with a price war and several have warned about the second half. The attacks in Spain will do nothing to help and should hit earnings, although we won’t know to what extent until the quarterly updates come in.”
Across Europe most major indices were down at least 1%, including Spain’s Ibex, which fell 1.2%. Traders pulled their cash out of equities into safe-haven bonds, pushing down the yields or returns on UK gilts, German bunds and US Treasuries.
Financial markets were already on the back foot after another week of chaos in the White House.
Trump has disbanded his business councils following multiple resignations in the wake of his comments on racial clashes in Charlottesville, Virginia, and the turmoil culminated in speculation Trump’s chief economic adviser, former Goldman Sachs banker Gary Cohn, could quit.
