French Exchange Plans Normal Open as Paris Awakens From Attacksby and
Euronext Paris sees no interruption to its normal schedule
Past terror incidents led to sharp, brief stock selloffs
French stocks will trade without interruption Monday as investors come to terms with attacks that left at least 127 people dead in Europe’s worst terror incident in more than a decade.
Euronext Paris is planning no alteration to its schedule, Caroline Nico, a spokeswoman for parent Euronext NV, said in an e-mail. Paris’s bourse is located in the district of the city’s 2nd arrondissement, miles from the sites of shootings and bombings that French President Francois Hollande has termed an “act of war” by Islamic State.
It’s been 10 years since Europe experienced terror attacks of comparable scope. Past incidents, such as bombings that killed 191 people on Madrid commuter trains in March 2004 and left more than 50 dead in London in July 2005, spurred selloffs in equities that were erased days or weeks later.
“Wouldn’t be surprised to see markets down 2 percent to 3 percent, maybe even more,” said Yogi Dewan, the chief executive officer of Hassium Asset Management in Gerrards Cross, U.K. His firm manages about $1 billion. “Sectors will be impacted in Europe such as insurance, travel and leisure. High oil prices for a significant period will also impact on an already fragile global growth story.”
Security forces across Europe are searching for clues about who carried out the assaults at seven locations in the French capital Friday night and whether they had support. Eight attackers died in the assault and police are currently pursuing others believed to have been involved, said a person familiar with the matter, who asked not to be identified discussing an ongoing operation.
French stocks, down about 9 percent from their April high, were among the year’s best performing in developed markets through Friday. The euro may fall, while German bonds and U.S. Treasuries are likely to rise, Dewan said. Oil could also climb on deteriorating sentiment toward Syria and the Middle East.
The attacks were committed “by a jihadist army against the values that we defend everywhere, against what we are: a free country,” Hollande said in a televised address Saturday. “It was an act of war that was prepared and organized abroad, with complicity” from individuals in France, he said.
“The risk premium will rise as no one knows whether any other terror attacks may happen,” said Cedric Ma, a Hong Kong-based senior investment strategist at Convoy Asset Management, which oversees about $500 million. “Safe assets and the U.S. dollar will go up, and there will be considerable pressure on European stocks in the short term.”
Stock gauges in the U.K. and Spain briefly tumbled and the nations’ government bonds rose after the London bombings of 2005 and Madrid attacks of 2004.
The FTSE 100 Index dropped 1.4 percent on July 7, 2005, the most in almost a year, and the yield on 10-year gilts fell eight basis points. The U.K. stock gauge recovered its losses the following day. Spain’s IBEX 35 Index declined 2.2 percent on March 11, 2004, erasing the drop by the end of that month.
In 2002, the Indonesian stock market sank 10 percent and the rupiah fell after the bombing of a nightclub in Bali. The Jakarta Stock Price Index rebounded 5.9 percent in the next week and had wiped off its losses in less than a month.
Gold rallied the most in a year and a half on Sept. 11, 2001, and Brent crude climbed to a three-month high. The Stoxx Europe 600 Index tanked 6.2 percent, the most in more than a decade, while U.S. markets were shut. When equities started trading again the next week, the Standard & Poor’s 500 Index sank 12 percent in five days, its biggest plunge since the aftermath of the 1987 crash.