Nice terror attack hits travel stocks as FTSE 100 opens down

Shares in EasyJet were down around 3 per cent. IAG, the company that owns British Airways and other European airlines, was down almost 2 per cent

The FTSE 100 was set to open lower on Friday after a terror attack in Nice over night
The FTSE 100 was set to open lower on Friday after a terror attack in Nice over night

The FTSE 100 opened down 0.23 per cent on Friday at 6,639.43 as traders took stock of the atrocities in Nice overnight.

Jasper Lawler, market analyst at CMC Markets UK, said: "European markets look set to open lower on Friday, coming off multi-month highs in the wake of the horrific attack last night during Bastille Day celebrations in Nice, France."

At least 84 people were killed at a Bastille Day celebration in Nice, France, after a truck was driven into a crowd.

Travel stocks were affected. Shares in EasyJet were down around 3 per cent. IAG, the company that owns British Airways and other European airlines, was down almost 2 per cent.

France's CAC index was down 0.7 per cent at 4,353 and the German DAX was down 0.5 per cent at 10,021.

Tony Cross, market analyst at Trustnet Direct, said: "London's FTSE 100 is starting the week's final session on a subdued note, as the market is once again left reflecting on another tragic terrorist attack in France.

"EasyJet and IAG are the two biggest fallers amongst the blue chips, with last night's news likely to act as a further deterrent to travel, whilst retailers are also on the back foot after that warning from Moody's over their prospects against a falling pound, even if the impact here is unlikely to be felt for a year or more."

The pound was up slightly at 0.7 per cent against the dollar at $1.3434 and 0.6 per cent against the euro at €1.2068 after the Bank of England's decision not to cut interest rates below 0.5 per cent on Thursday came as a surprise to traders.

The Monetary Policy Committee decided to keep interest rates on hold despite fears of an economic slowdown after the UK's decision to leave the European Union.

It hinted that a rate cut would come in August instead.

"In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the Committee expect monetary policy to be loosened in August," the MPC said.

There is speculation over whether this will involve cutting the Bank of England's base rate or other stimulus measures.

Some suggested that the Bank of England decided to wait to get a better picture of how Brexit has affected the economy. Others said it was a show of solidarity with the Conservative goverment under Theresa May.

Stock markets and the pound have steadied since May was announced as the next UK prime minister.

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