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FTSE 100 slumps as airlines and travel companies are sold off due to terror fears and Washington chaos continues

  • FTSE 100 1.03% lower at 7311 points while FTSE 250 0.92% down
  • British Airways owner IAG down 2% at 611p; Easyjet down 2.1% to 1,273
  • Analysts expect the index to bounce back though

The FTSE 100 has fallen more than 1 per cent today as investors were spooked by a combination of the terror attack in Barcelona and political turmoil in America.

The attack last night in Spain has added more negative sentiment to the already downbeat markets that have resulted from Saturday's Charlottesville riot and President Trump's reaction to it.

As of late morning the FTSE 100 was 1.03 per cent lower at 7311 points. The FTSE 250 was faring little better, down 0.92 per cent at 19,590. The pound was up 0.15 per cent against the dollar at $1.2887 and flat versus the euro at 1.0975.

The FTSE 100 has slumped over 1 per cent as investors were spooked by a combination of the terror attack in Barcelona and political turmoil in America.

The FTSE 100 has slumped over 1 per cent as investors were spooked by a combination of the terror attack in Barcelona and political turmoil in America.

Travel companies and airlines have been particularly hard hit by the attack in Barcelona, as investors took the view that one of the most popular destination countries in the world is less safe than they thought.

British Airways owner International Consolidation Airlines Group (IAG) was one of the worst performing FTSE 100 stocks, down 2 per cent or 13p at 611p, while travel agency TUI dropped 0.5 per cent to 1,327p.

Low cost carrier Easyjet tumbled 2.1 per cent to 1,273p while Irish-listed Ryanair shares slid more than 2 per cent.

Continental carriers were dragging down their respective European indexes, with the Frances' CAC 40 dropping 1.2 per cent, Germany's Dax falling 0.8 per cent and Spain's IBEX dropping more than 1 per cent.

Alton Towers owner Merlin Entertainments was knocked down 1.4 per cent or 6.6p to 457.8p, amid fears of a slowdown in visitors to some of the company's main tourist attractions including Alton Towers and the London Eye.

Holiday company Thomas Cook was down 2 per cent to 122.3p and Wizz Air down 2.5 per cent or 72p at 2,794p.

Senior market analyst at ETX Capital Neil Wilson said: 'Airlines bore the brunt of a risk-off turn on the open, with shares in Ryanair, IAG, Air France KLM, Lufthansa and EasyJet all slumping following the terror attacks in Spain.'

'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.'

Wilson said a bounce back for share might not be long in coming though.

'If the lesson from previous terror attacks is anything to go by, whilst airlines and maybe some luxury goods stocks can expect to see earnings hit, the broader market is capable of rebounding reasonably quickly.'

British Airways owner International Consolidation Airlines Group was one of the worst performing FTSE 100 stocks, falling 2 per cent.

British Airways owner International Consolidation Airlines Group was one of the worst performing FTSE 100 stocks, falling 2 per cent.

'Unsurprisingly we are seeing the airlines leading the FTSE lower this morning, in the aftermath of yesterday's terrorist attack in Barcelona,' said IG market analyst Joshua Mahony. '

'In London, Paris and now Barcelona, the terrorist attacks over recent years have taken place in the three most visited cities in Europe, with inevitable implications for numbers over the coming year. With Turkish tourism numbers finally coming back, the focus on top European cities will arguably be a bigger hit to low cost European carriers if people decide to stay away.'

Tags Money Markets

ABOUT THE AUTHOR celebrityrave

Journalist, writer and broadcaster, based in London and Paris, her latest book is Touché: A French Woman's Take on the English. Read more articles from Agnes.

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