Europe midday: Stocks in the red as travel sector drops after Brussels attacks

European equity markets were down but off earlier lows, with travel and leisure stocks the worst performers as terror attacks in Brussels undermined investor sentiment.

At midday, the benchmark Stoxx Europe 600 index was down 0.6%, Germany’s DAX was off 0.2% and France’s CAC 40 was 0.5% weaker. The Stoxx 600 travel & leisure index fell 1.9%.

Among individual stocks, Ryanair, EasyJet, IAG, Accor, InterContinental, TUI and Thomas Cook were all on the back foot.

The mood was sombre as market participants took in news of the events in Brussels. At least 26 people were killed and others injured as suicide bombers launched twin attacks on Brussels’ Zaventem airport and the city’s Maalbeek metro station.

Belgian broadcaster RTBF, citing a federal prosecutor, confirmed the airport bombings were a suicide attack. The explosions came just days after the arrest in Brussels of a suspected participant in the November terror attacks that killed 130 people in Paris.

Agence France Presse cited Pierre Meys, a spokesman for the Brussels fire brigade, as saying at least 21 people were dead in the two attacks, with 11 killed at the airport.

The entire metro system has now been shut down and the Belgian capital is on its highest state of terror alert.

The earlier part of Tuesday’s session saw investors pile in to safety, with the yen, gold and government bonds all making strong gains, but this was not so apparent by midday

“Investors will be fearful of the knock-on to European traveller sentiment which was clearly dented in the wake of the Parisian attacks last November (as well as those in Tunisia and Egypt),” said Mike van Dulken, head of research at Accendo Markets.

“It's always a sad day when terrorism has to be the driver to kick markets from their state of calm. It’s also a sign of times when the market response is - in relative terms - so muted. Investors have had to develop a thick skin for such horrific events over the years and their encouraging defiance may again result in near-term recovery for the stocks affected.”

Oil prices were in the red. West Texas Intermediate was down 0.4% to $41.34 a barrel and Brent crude was off 0.1% at $41.49.

A senior OPEC delegate has said Saudi Arabia was prepared to sign up to an oil output freeze next month even if Iran does not take part.

In corporate news, holiday operator Thomas Cook suffered a blow not just from the Brussels attacks but also after it cautioned that summer bookings will be below the previous year following terrorist attacks in Turkey and Egypt.

Anglo American slipped after announcing the successful completion of its bond buyback programme.

With so much going on on the geopolitical front, mixed data releases took a back seat.

The latest survey from the ZEW Center for European Economic Research in Mannheim revealed that German investor confidence was weaker than expected in March.

However, the IFO Institute painted a cheerier picture, as its business climate index climbed to 106.7 from 105.7 a month ago, higher than the consensus forecast of 105.9.

Elsewhere, the composite purchasing managers’ index for the Eurozone rose in March, signalling a modest pick-up in activity.