European travel and leisure stocks slide as explosions rock Belgian capital

European travel and leisure stocks were under the cosh on Tuesday following terror attacks 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.

At 1150 GMT, the Stoxx 600 travel & leisure index was down 1.9%. Among individual stocks in the sector, Ryanair, British Airways and Iberia parent International Consolidated Airlines Group, EasyJet, Eurotunnel, TUI, Thomas Cook, Accor and InterContinental Hotels were all firmly lower.

“We have seen pretty aggressive selling after the sad news from Belgium,” said Atif Latif, director of trading at Guardian Stockbrokers.

“Government bonds /gold picked up strongly as safe haven flows were moved out of equities until we get some more clarity and news.”

Latif pointed out that the travel and leisure sector has been sold off recently with the tensions in the Middle East, Paris and Turkey resulting in cancelled flight and holidays.

Mike van Dulken, head of research at Accendo Markets, said: “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).

“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.”

The sector was also hit by a downbeat pre-close trading update from tour operator Thomas Cook, which cautioned on Tuesday that that summer bookings will be below the previous year following terrorist attacks in Turkey and Egypt. It also said it was operating “in a volatile market environment”.

CMC Markets analyst Jasper Lawler said: “The explosions are bad news for airlines which have just started to see passenger demand pick up again after a slump in the wake of multiple terrorist incidents at the end of last year, including the attack on Paris. The response from authorities is likely to be another extension of security controls which make travel even less attractive for tourists.”