Nearly $3bn lost from travel shares after Paris attack

European shares were steady on Monday, supported by gains in the energy sector that helped offset a slump in travel stocks following Friday’s attacks in Paris that killed at least 129 people.

Energy shares outperformed the broader market because of a rally in oil prices that followed French air strikes against Islamic State targets in Syria. French shares slightly underperformed as markets opened for the first time since the co-ordinated attacks on Friday evening in Paris by Islamist militants.

Around €2.6 billion was wiped off the STOXX 60 Travel & Leisure index amid fears that the sector could be impacted by loss of consumer confidence. Shares in French hotel group Accor fell 5.1 per cent, Air France fell 6.5 per cent while shares in Eurotunnel and Aeroports de Paris, the operator of Paris' Charles de Gaulle and Orly airports, were down more than 4 per cent.

Luxury stocks were also under pressure. Hermes, LVMH and Kering, which get a large part of their sales from foreign tourists in Paris, were all down more than 1 per cent.

“Paris is one of the most important cities worldwide in terms of luxury spending and the timing is not good too - a few weeks before Christmas, the most important period for retailers,” said Gregoire Laverne, fund manager at Roche Brune Asset Management.

“Those attacks will definitely have a long-term negative impact on the tourism sector in France, and all sectors (which depend) on tourists, but it cannot be measured yet although the market tends to forecast the worst case scenario.”

Some highlighted France’s Showroomprive.com as an outperformer in the fashion sector, up 0.3 per cent, with Internet-only retailers seen as more insulated from the drop in confidence.

“Companies that retail over the web could outperform,” said Clairinvest fund manager Ion-Marc Valahu.

Outside of retail and travel stocks, European stock markets were broadly resilient to the fallout from the attacks, and it was seen as strengthening the case for the European Central Bank to provide further monetary stimulus.

The pan-European FTSEurofirst 300 index edged up 0.2 per cent and France’s CAC was down 0.1 per cent.

Energy stocks were the leading sectoral gainers, rising 2 per cent, as crude oil prices edged up after France launched large-scale air strikes against Islamic State in Syria. Basic resources stocks also firmed.

KBC rose more than 3 per cent after the Belgian financial group posted a bigger-than-expected net profit, as a strong performance in its traditional banking and insurance businesses made up for a weaker showing of its dealing room.

Among outstanding losers, Sonova fell 7.5 per cent as the hearing aid maker cut its sales and profit forecasts after weak cochlear implant sales, sluggish business with U.S. veterans and a squeeze on overseas earnings from the strong Swiss franc.

- Reuters