Turkey bombs blast shares

THE dollar tumbled and stock markets slumped in the wake of the terrorist attacks in Istanbul as investors fled for fear of further atrocities.

Previously-buoyant stocks performed dramatic U-turns as the London, Paris and Frankfurt exchanges all saw sell-offs of 1% or more. Companies in Germany - with the closest ties to Turkey - suffered most.

'It's a very depressing day,' said Julian Jessop, senior international economist at Standard Chartered. 'Markets are absolutely right to be alarmed. These were international targets in what should be one of the safest countries - a stable, secular Muslim State.'

Shares in HSBC, which had two offices targeted in the attacks, fell 11p to 860p. The bank's status as Britain's most valuable company caused widespread additional concern as it highlighted the intention of terrorists to strike at the heart of British interests.

As alarm spread throughout Europe's dealing rooms, safe-haven government bond prices soared while gold, oil and the Swiss franc also made significant gains.

The dollar, once seen as the safest place for money in times of political instability, suffered an across-the-board sell-off. 'The fear in the market is that terrorist attacks are going to increase,' said Peter Fertig, chief fixed-income strategist at Dresdner Kleinwort Wasserstein.

The FTSE 100 index reversed early gains to fall 19.4 to 4308. Among big fallers were Hilton Group, British Airways and German tour operator TUI. An opening fall for the Dow Jones Industrial Average in New York was blamed on the terror attack.

Gold rose 85 US cents to $396.50 an ounce - creeping ever closer to the $400 mark touched earlier this week before slipping back moderately. The Swiss franc was marked up 0.66% at $1.2985.

Oil prices reversed early losses, gaining 22 cents a barrel to $30 on the London Brent contract for January.

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