EUROPE MARKETS: Spanish Stocks Lead European Selloff After Deadly Terrorist Attack In Barcelona

U.S. political worries also pressuring European stocks

Spanish stocks slumped Friday, fronting a selloff across European equity markets a day after a terrorist attack killed at least 13 people in the heart of Barcelona.

More than 100 people were injured in Spain's second-largest city ( in a late Thursday's afternoon attack claimed by Islamic State, and the death toll could rise, officials said. Hours later, police killed five alleged terrorists as they responded to a separate attack that hurt seven people in Cambrils, a town southwest of Barcelona, the Catalan government said.

In Madrid, the IBEX 35 dropped 1.1% to 10,327, and had fallen by as much as 1.7% in early trade, as all but two components were lower. The Stoxx Europe 600 index fell 1% to 3763.30.

"Airlines bore the brunt of a risk-off turn on the open," said ETX Capital's senior market analyst Neil Wilson in a note. "As we've seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings. Investors are concerned that demand will fall over the rest of the year, which was already looking like it would be a tough patch for the industry."

Shares of Air France-KLM SA (AF.FR) were pulled down 2.9%, Ryanair Holdings PLC (RYAAY) gave up 2.6% and Deutsche Lufthansa AG (LHA.XE) moved 1.7% lower. International Consolidated Airlines Group SA (IAG.LN) , which runs British Airways, fell 2.4%, and easyJet PLC (EZJ.LN) lost 2.5%.

On the IBEX 35, there was a 2.6% drop in shares of Melia Hotels International SA (MEL.MC) . Bank stocks were in the red, with Banco de Sabadell SA (SAB.MC) and Banco Santander SA (SAN) down 1.8% and 1.6%, respectively. Supermarket chain Distribuidora Internacional de Alimentacion SA (DIA.MC) was down 2.9%.

European stocks were also under pressure following Wall Street's selloff ( on Thursday on worries that White House economic adviser Gary Cohn would leave his role, and deal a blow to U.S. President Donald Trump's plan for a tax-code overhaul. The White House said Thursday that Cohn is staying, but Cohn was reportedly upset by Trump's response to last weekend's deadly white supremacist rally in Charlottesville, Va.

"Markets had originally given President Trump the benefit of the doubt and hoped his abrasive style would cut through the political web and get things done. However, far from being a force for change, seven months into his presidency there has been no noticeable policy success and U.S. politics is more divided than ever," said Rebecca O'Keeffe, head of investment at Interactive Investor, in a note.

"Dissolving his infrastructure council before it even began highlights just how volatile the situation is and the question for investors is changing from what support Trump may deliver to markets to what risk he brings," she said.

The Stoxx Europe 600 was on course for a weekly rise of 0.3%.

Indexes: France's CAC 40 index fell 0.9% to 5,087 and Germany's DAX 30 index fell 0.8% to 12,105. The U.K.'s FTSE 100 index dropped 0.9% to 7,322.85.

The euro bought $1.1756,up from $1.1725 late Thursday in New York.

(END) Dow Jones Newswires

August 18, 2017 05:29 ET (09:29 GMT)