Travel stocks in Europe are tumbling after the Barcelona terror attack

LONDON — Stocks across Europe are dropping on Friday morning as markets react to the duo of terror attacks in Barcelona on Friday and rumours that one of Donald Trump’s key advisers could be set to resign from the White House.

Police in Spain are still hunting for the attacker who drove a van down a crowded tourist street in Barcelona on Thursday, killing at least 13 people.

Three people have been arrested in connection with the Las Ramblas attack, but the suspected driver of the van is still on the run, more than 12 hours after the attack took place.

Travel stocks are the most impacted by the attack as investors fear that tourists would may be deterred from travelling in the aftermath of the events. This follows a pattern seen after most major terrorist incidents in Europe in the last few years.

By 8.40 a.m. BST (3.40 a.m. ET) airline stocks are suffering, with major budget airlines losing more than 2% in early trading. Here’s how easyJet looks:

And here is RyanAir:

International Consolidated Airlines Group, the parent company of British Airways and Spain’s national carrier, Iberia Air, has also dropped more than 2%.

The broader market reaction to the attacks is largely fairly subdued, with the main driver of downward action in the continent’s major bourses being the rumour on Thursday that Gary Cohn, President Donald Trump’s chief economic advisor, is set to resign his post.

That rumour, though totally unsubstantiated, sent US stocks significantly lower, that then spread to Asia overnight, before impacting European stocks on Friday morning.

“A tweet yesterday indicating that Gary Cohn, Director of the National Economic Council and a critical influence on policy decisions in the White House, had resigned from his post shocked US markets shortly after the open,” Henry Croft, an analyst at Accendo Markets wrote in an email.

“Despite the tweet being deleted and officially denied by the White House, the damage had already been done, and comments suggesting that there was “no smoke without fire” soon emerged.”

Major bourses across Europe are nursing losses as a result, with Spain’s IBEX, perhaps understandably, losing the most as investors digest both the Cohn rumours and the atrocities in Barcelona. Here is the scoreboard:

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