Morning Update – 23/03/2016 by Michela Jaccarini
March 23, 2016Good morning!
This week hasn’t started off the way we all hoped. Yesterday the world woke up to terrible news about a terrorist attack in Brussels which has killed at least 30 people. The terrorist attacks on the main airport and a Metro in Brussels introduced a new wave of volatility in the financial markets. Locally to the UK, travel and leisure stocks negatively affected the FTSE, as fears are growing over geopolitical concerns.
Jasper Lawler of CMC Markets said: “Terrorist incidents are becoming more frequent in Europe, which is a travesty for those directly affected, but also makes investing in the continent less attractive”. Thomas Cook Group and InterContinental Hotels Group recorded heavy losses of 4.3% and 1.6% respectively. Stocks of airline, airport and companies also fell sharply.
As the attacks instilled fear into the markets, investors rushed for safe havens such as gold, which saw a price increase of 1.3%. Gold producers Fresnillo and Randgold Resources were among the biggest FTSE 100 risers, up 1.4% and 1.6% respectively. Shifting towards the currency aspect of the situation, sterling sunk by 1.4% against the dollar to 1.4191. Another safe haven that gained momentum was the Japanese Yen that climbed 1% against the euro.
Another surprise interest rate cut came from the National Bank of Hungary. It cut its main rate to a record low of 1.2% in an attempt to revive growth and inflation by weakening the Hungarian forint which has been one of Eastern Europe’s strongest currencies this year. The forint fell by 0.5% against the euro to 312.42 following the announcement.
