Global Stocks Falter On Spain Attacks

Stocks markets around the world slid Friday as traders sought haven investments such as the yen and gold following an attack in Barcelona that sent airline share prices tumbling

LONDON, (UrduPoint / Pakistan Point News - 18th Aug, 2017 ) - Stocks markets around the world slid Friday as traders sought haven investments such as the Yen and gold following an attack in Barcelona that sent airline share prices tumbling.

Thursday's deadly van attack in the Catalan capital compounded investors' concerns over economic policy paralysis in Washington. "The recent shift towards haven markets continues," said Joshua Mahony, market analyst at IG trading group.

David Madden, analyst at CMC Markets UK, noted that "the combination of political uncertainty in the US and security concerns in Europe are weighing on investor sentiment". In afternoon trading, the main stock indices in London, Paris and Madrid were each down 1.0 percent compared with Thursday's closing levels.

Gold, seen as a store of value in uncertain times, jumped back above $1,300 per ounze for the first time in nine months, while the yen strengthened against the Dollar and struck a near-seven week high versus the euro.

"While the week started well, we are now seeing widespread selling for global stocks, with traders instead choosing to shift their focus towards the likes of gold and the yen," added Mahony. Airline shares suffered with Air France-KLM shedding 1.4 percent and IAG, which owns British Airways and Spanish carrier Iberia, down 1.5 percent.

"As we've seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings," Neil Wilson, senior market analyst at ETX Capital said in a client note.

"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.

" Earlier in Asian trading, Tokyo led the fall in regional stocks, slumping to its lowest close since early May, with the Nikkei also struggling in the face of the resurgent yen.

Wall Street stocks opened down on Friday, with the Dow Jones Industrial Average dipping 0.1 percent and the S&P 500 Index slipping less than a tenth of a percentage point. On Thursday, the S&P 500 Index tumbled by its second-biggest drop of the year, with financial and technology shares among the worst performers.

US stocks had been hit by rumours that Donald Trump's economic advisor Gary Cohn would resign owing to unhappiness over the president's response to a violent rally by racist groups in Charlottesville, although a White House source denied the claims.

"The attack in Spain and the rising doubt that Trump will be able to push through with his economic policies are among a series of unfortunate events that's creating uncertainty for investors to pullback and capitalise on their (recent) gains," said Jonathan Ravelas, chief market strategist at BDO Unibank.

Sentiment in the US was dented also after the White House said Trump had abandoned plans to form an advisory council on infrastructure, worsening business fears he will struggle to enact pledges to boost the economy. Stock markets had been clawing back losses from last week's slump . over fears of military clashes between North Korea and the US before the latest downturn hit.