Airline stocks across Asia-Pacific markets have been sold-off in the wake of the terror attacks in Paris, one of the world’s most popular tourist destinations.
The attacks in Paris on Friday, which have killed at least 129 people, have sparked a rout in airline stocks today as investors weigh up the possible economic fallout from dampened tourism to the country.
France is the world’s top tourist destination, with more than 80 million foreign tourists in 2013, according to the government. While the British, Italians and Germans make up a large proportion of visitors to Paris, travellers from the US and China are also among the most frequent visitors.
Bloomberg’s Asia Pacific Airlines index, which aggregates airline stocks across the region, dropped as much as 2.8 per cent today, as investors shedded airlines stocks across Asian sharemarkets.
“This event will likely hurt France’s tourist industry,” OANDA Australia and Asia Pacific senior currency trader Stephen Innes said.
Tourism to Paris dropped after the terror attacks against the Charlie Hebdo satirical magazine which killed 17 people. The Paris Tourist Office said hotel stays dropped by 3.3 per cent in the first quarter of the year, which it attributed to the attacks.
On the Australian sharemarket, Qantas shares were down 3 per cent at $3.50 at 1pm. The industrials sector on the ASX, which tracks logistics and transports stocks, was the biggest weight on the bourse at noon.
Meanwhile, the Chinese airlines were particularly hard hit, with Air China, China Eastern, China Southern all falling between 3 and 4 per cent. Elsewhere, Cathay Pacific slipped as much as 1.6 per cent while Singapore Airlines fell 1.4 per cent.
IG market strategist Evan Lucas said the financial market fallout from the attacks was likely to be short-lived, but said consumer confidence could be dented.
“What might be affected from the Paris attacks could be a change in spending from the consumer over the coming quarter and a possible shift in confidence,” Mr Lucas said.
Mr Innes said based on the economic fallout, this should play into the market’s anticipated central bank policy divergence argument increasingly driven by the European Central Bank, which is planning to continue to ease monetary policy while the US Federal Reserve looks to lift rates for the first time in a decade.
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