European stock markets open lower after Paris attacks; Asian markets closed down

Pedestrians walk past a electronic board displaying the closing Hang Seng Index figure in Hong Kong on Nov 16, 2015.
Pedestrians walk past a electronic board displaying the closing Hang Seng Index figure in Hong Kong on Nov 16, 2015.PHOTO: EPA

European stocks opened lower in an expected knee-jerk reaction to the deadly terrorist attacks in Paris that claimed 129 lives, with French shares leading the sell-off.

As of 4.55pm, France's CAC 40 was down 0.15 per cent, Germany's DAX was down 0.12 per cent, while Britain's FTSE 100 managed to reverse initial losses and is up 0.38 per cent.

Financial bettors were expecting much lower numbers. Some saw the FTSE 100 opening down 0.7 per cent lower, the DAX to open 1.3 per cent down, and CAC to fall 2.3 per cent.

"This isn't the Sept 11 attacks, so European stocks shouldn't drop that much," remisier Alvin Yong said. "US Dow futures are down, which may mean a muted opening for Wall Street. It really depends on how badly European stocks fare later on."

While the attacks are likely to weigh on investors' confidence in the near term, some say this could reinforce the ECB's resolve to ease monetary policy.

DBS Bank chief investment officer Lim Say Boon said the Paris attacks are "appalling and tragic," but are unlikely to have a lasting impact on markets.

Global equities were already correcting before the attacks, he pointed out.

"Will the attacks alter the course of the French, European and global economies? The answer will likely be 'no'. Will the acts of terror alter the earnings trend? No," he said.

"Will they draw France or other world powers into conflicts in the Middle East? They have already been drawn into those conflicts. Their involvement will intensify. But they won't intensify to the point where they impact on the economy and corporate earnings," he said.

Here in Asia, Shanghai and Shenzhen reversed initial losses to close in positive territory on speculated state buying after China moved to raise margin financing requirements.

Singapore managed to claw back some ground due to Chinese bourses' last minute recovery. But the STI still remains in the red, down 0.21 per cent as of 4.55 pm. Hong Kong closed down 1.72 per cent, Japan closed 1.04 per cent lower, and Korea closed 1.53 per cent lower.