View the article online at http://citywire.co.uk/money/article/a893132
Pound and travel stocks fall after Brussels attack
Bomb explosions in Brussels, claimed to have been carried out by Islamic State, or Isis, kill at least 34 people and injure many more.
(Update) The pound and tourism stocks tumbled today after explosions in Brussels claimed to have been carried out by Islamic State, or Isis, killed at least 30 people and left many seriously injured.
Already weakened by political splits in the Conservative government and new data showing UK inflation stuck at a very low 0.3% last month, the pound plunged 1% against the dollar to $1.4209 as investors sought safe havens following news of the blasts shortly after 7am GMT.
There was even speculation that the latest terrorist outrage could influence the outcome of the UK’s European referendum on 23 June.
Gold, a traditional safe haven in times of danger, rose 0.64% to $1,251 an ounce with miners of the precious metal like Randgold Resources (RRS) making gains in London.
But it was travel-related stocks that fell the most. Travel agent TUI Travel (TUI) was the FTSE 100’s biggest decliner, down over 3% to 971.5p, with InterContinental Hotels (IHG) and British Airways owner International Consolidated Airlines Group (ICAG) both off 2.3%.
After initially retreating 31 points or 0.5%, the FTSE 100 approached the close just eight points or 0.1% down at 6,176, with bookies Paddy Power Betfair, up 3.5% at £93.40, the biggest riser.
Capita (CPI) fell 2.8% to a two-week low of £10.17 after analysts at Stifel cut the outsourcer to ‘sell’ from ‘hold’.
SVG Capital (SVI ) gained 2% to 501.5p after the private equity investment trust continued the run of good news from the sector with strong annual results.
Smaller company newspaper publisher Johnston Press (JPR) jumped 15% to 47.25p as it unveiled further cost cutting.
Two blasts hit the departures area of Zaventem airport shortly after 7am GMT, according to the BBC. An hour later an explosion occurred in Maalbeck metro station.
The airport and city transport system were closed as Belgium raised its terror threat to its highest level.
The attack follows the arrest in Brussels last week of Salah Abdeslam, who is believed to have been involved in the terrorist attacks in Paris last November.
In the afternoon a news agency affiliated to Isis put out a statement saying the group had claimed responsibility.
Security at Gatwick and Heathrow airports was stepped up and the prime minister, David Cameron, chaired a meeting of the Cobra emergency response committee this morning.
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by Gavin Lumsden on Oct 28, 2016 at 16:26