The unconscionable terrorist attacks that occurred last week in Paris caused Asian stocks to undergo a sell-off on Monday, affecting tourism related industries and airline operators in particular.
Sharp but Limited Effect
The brutal attacks, which caused the deaths of 132 people and left hundreds wounded, are expected to have a sharp effect on stocks markets this week according to analysts. However, more than likely, the financial effects will be short term, whereas the long term effects could influence politics and the risk environment.
By Sunday, U.S. stock had already felt the effects of the tragedy as futures sank, with Dow futures falling by 150 points and S&P futures declining 0.76 percent during early Asian trading. European stocks did not escape unscathed either, as the FTSE, German DAX, and French CAC all opened between 1.8% and 3.7% lower.
‘Safe’ Commodities Gain
This was not a good week for Wall Street in general, as on Friday most of the major U.S. averages lost over 1%, under the pressure of continuously declining oil prices, tech company sell-offs, and gloomy reports on consumers’ health. In the worst showing since the week of August 17th, last week ended with a fall of over 3.5%, putting an end to recent gains over the last six weeks.
However, increase in geopolitical risk usually spells gains for ‘safe’ commodities such as gold and oil, and this time was no exception. The price of gold went up by 1% to settle at $1,091.70 an ounce, while West Texas Intermediate crude increased by 0.8% to reach a $41.05 a barrel during early Asian trading. Brent also gained 1.1%, to $44.96 a barrel.
The attack influenced currencies as well, with the yen inching up 0.1% against the dollar, while the Euro fell 0.5% to reach 133.24 against the Japanese yen as Asian markets led an early, heavy sell off. Despite this, unless there are further attacks, there is unlikely to be any extensive financial impact from this tragedy.