Stock are expected open firmly in the red on Monday following the terrorist attacks by militants on Friday evening, with commodities pricing also predicted to be affected.
Financial markets around the globe are expected to be hit by the news and the euro is expected to fall against the pound and the dollar, although analysts do not anticipate a prolonged effect.
“It is highly possible that France will get drawn into recession against because of what has happened,” veteran market commentator David Buik was quoted by the Sunday Times as saying.
“If this had happened during market trading hours there could have been a panic, but markets had a weekend to digest all the information,” chief technical analyst Eiji Kinouchi told Reuters.
French president Francois Hollande declared a national state of emergency on Saturday, urging citizens to remain indoors, and said there would be three days of national mourning.Stock markets in France are still due to open on Monday, according to Euronext.
The attacks could damage the country’s economy, particularly its travel and tourism sector, analysts have warned
Rob Lutts, chief investment officer at Cabot Wealth Management, said the scale of the attacks “could have a meaningful negative impact” on the country’s tourist numbers, which are currently the highest in the world.
European airports have increased their security in the wake of the atrocities.
On Saturday Air France was forced to ground a Paris-bound flight, remove all its passengers and conduct a search using sniffer dogs after it received a threat via Twitter.
French airports have remained open, although several airlines choose to temporarily cancel all flights to the capital.
“Given that France has a big tourism industry there may be some damage to the economy if this leads to a fall in visitors to France, or in tourism in general after the crash of a Russian plane,” said SMBC Nikko Securities financial market analyst, Hidenori Suezawa, as quoted by Reuters.
The news wire also cited economist Amrita Sen from Energy Aspects, who suggested oil would be pulled in different directions.
“Currently sentiment is really bearish, so this could be seen as hurting demand, so oil prices could fall further,” he said.
Sen added that a short-term oil sell-off could be followed by a medium-term bounce if the Paris attacks are thought to lead to a serious escalation of tensions in the Middle East.
Britain to hold emergency response meeting
A UK government meeting is reportedly due to be held on Sunday so that senior ministers can discuss what action Britain will take.
“The Home Secretary [Theresa May] will chair a COBRA [on Sunday] morning on the Paris attacks and the government’s response,” a government source told Reuters.
An initial meeting was held on Saturday, confirming that Britain would maintain its threat level at “severe”, meaning that an attack is believed to be highly likely.A statement released by the government told the public: “Don’t become fearful or withdraw from the streets.”
It added that it work has previously been carried out by the police to “protect sites and staff from a variety of terrorist attacks [including] music, sport and entertainment venues, restaurants, hotels and shops.”
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