HONG KONG — Stock markets mostly fell on
Monday following the deadly weekend terror attacks in Paris — with
airline stocks taking a beating on concerns over the tourism industry.
The assault on Friday night in the French capital, which killed 132 people, also sent the euro tumbling on fears for security in Europe and its effect on the struggling eurozone economy.
It added to uncertainty in already nervous markets, which ended last week on a low due to increasing worries about the global economy.
Airlines fell across Asia, with declines of 3% for Japan Airlines, 6.5% for Virgin Australia and 2.7% for Cathay Pacific.
In Shanghai, there was big selling in China Eastern Airlines and Air China. Tourist firms also lost, with China CYTS Tours and China International Travel Service down more than 1%.
"There will definitely be a negative psychological impact in the short term in tourism-related sectors. Airlines are particularly affected," said analyst Zhang Qi at Haitong Securities. The situation in France was "still quite uncertain, so investors seem to be broadly risk-off today".
Regional stock indices were mostly lower, with Hong Kong 1.7% off by the close, while Tokyo fell more than 1% and Sydney gave up 0.9%. In Europe, Paris opened 1.1% lower, while London was 0.3% down and Frankfurt fell 0.7%.
"There is no doubt that the attacks in Paris will contribute to short-term nervousness," Shane Oliver, a Sydney-based strategist at AMP Capital Investors, said.
However, he expected the Paris-linked losses to be brief, pointing out that markets had bounced back from initial selling following past terror attacks.
Selling also hit the euro, which was already under pressure from expectations the European Central Bank will loosen monetary policy to shore up the eurozone economy.
High-risk emerging market currencies such as the South Korean won and Indonesian rupiah fell, while the search for lower risk lifted the gold price.
Adding to selling pressure in Tokyo was data on Monday showing the Japanese economy had slipped into recession for the second time in three years.
The soft results continue to flow despite Prime Minister Shinzo Abe’s big-spending three-year plan to revitalise the torpid economy and end years of debilitating deflation.
Taro Saito, the director of economic research at NLI Research Institute, said: "Companies are reluctant to invest despite their sound profits." He added that while consumer spending had improved, "its overall trend remains weak".
In China, authorities doubled the deposit required for investors to borrow funds to trade stocks — known as margin trading — as they try to limit a practice that sparked a huge market bubble and rout.
The minimum requirement for margin trading was hiked to 100% from 50%, meaning traders must have the same level of funds in their accounts as the amount they want to borrow.
Margin trading was behind a stock market rally that sent the Shanghai index up 150% in a year, before it crashed in June.
Shanghai is rebounding from the volatility, with the benchmark index now up 22% from its August low. It reversed early losses on Monday to end the day 0.7% higher.
AFP
 |
| Mourners write messages in chalk as they gather to pay their respects to victims of the terrorist attacks, at Place de la Republique, in Paris, France on Sunday. |
The assault on Friday night in the French capital, which killed 132 people, also sent the euro tumbling on fears for security in Europe and its effect on the struggling eurozone economy.
It added to uncertainty in already nervous markets, which ended last week on a low due to increasing worries about the global economy.
Airlines fell across Asia, with declines of 3% for Japan Airlines, 6.5% for Virgin Australia and 2.7% for Cathay Pacific.
In Shanghai, there was big selling in China Eastern Airlines and Air China. Tourist firms also lost, with China CYTS Tours and China International Travel Service down more than 1%.
"There will definitely be a negative psychological impact in the short term in tourism-related sectors. Airlines are particularly affected," said analyst Zhang Qi at Haitong Securities. The situation in France was "still quite uncertain, so investors seem to be broadly risk-off today".
Regional stock indices were mostly lower, with Hong Kong 1.7% off by the close, while Tokyo fell more than 1% and Sydney gave up 0.9%. In Europe, Paris opened 1.1% lower, while London was 0.3% down and Frankfurt fell 0.7%.
"There is no doubt that the attacks in Paris will contribute to short-term nervousness," Shane Oliver, a Sydney-based strategist at AMP Capital Investors, said.
However, he expected the Paris-linked losses to be brief, pointing out that markets had bounced back from initial selling following past terror attacks.
Selling also hit the euro, which was already under pressure from expectations the European Central Bank will loosen monetary policy to shore up the eurozone economy.
High-risk emerging market currencies such as the South Korean won and Indonesian rupiah fell, while the search for lower risk lifted the gold price.
Adding to selling pressure in Tokyo was data on Monday showing the Japanese economy had slipped into recession for the second time in three years.
The soft results continue to flow despite Prime Minister Shinzo Abe’s big-spending three-year plan to revitalise the torpid economy and end years of debilitating deflation.
Taro Saito, the director of economic research at NLI Research Institute, said: "Companies are reluctant to invest despite their sound profits." He added that while consumer spending had improved, "its overall trend remains weak".
In China, authorities doubled the deposit required for investors to borrow funds to trade stocks — known as margin trading — as they try to limit a practice that sparked a huge market bubble and rout.
The minimum requirement for margin trading was hiked to 100% from 50%, meaning traders must have the same level of funds in their accounts as the amount they want to borrow.
Margin trading was behind a stock market rally that sent the Shanghai index up 150% in a year, before it crashed in June.
Shanghai is rebounding from the volatility, with the benchmark index now up 22% from its August low. It reversed early losses on Monday to end the day 0.7% higher.
AFP
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