LONDON (REUTERS) - European shares held steady on Monday (Nov 16), supported by gains in the energy sector that helped offset a slump in travel stocks following Friday's militant attacks in Paris.
Energy shares outpaced the broader market, buoyed by the prospect of higher oil prices following stepped-up French air strikes on Islamic State targets in Syria.
French shares slightly underperformed when markets reopened for the first time since the coordinated suicide bombings and shootings by Islamist militants that killed 129 people.
Around 2.3 billion euros (S$3.5 billion) were wiped off the STOXX 60 Travel & Leisure index amid fears that the sector could be harmed by a loss of consumer confidence.
Shares in French hotel group Accor fell 4.7 per cent, Air France fell 5.7 per cent while shares in Eurotunnel and Aeroports de Paris, the operator of Paris' Charles de Gaulle and Orly airports, were down over 3.8 per cent.
Luxury stocks were also under pressure. Hermes, LVMH and Kering, which get a large part of their sales from foreign tourists in Paris, were down 0.7-1.4 per cent.
"Paris is one of the most important cities worldwide in terms of luxury spending and the timing (of the attacks) is not good too - a few weeks before Christmas, the most important period for retailers," said Gregoire Laverne, fund manager at Roche Brune Asset Management. "Those attacks will definitely have a long-term negative impact on the tourism sector in France, and all sectors (which depend) on tourists, but it cannot be measured yet ... although the market tends to forecast the worst case scenario."
Some highlighted France's Showroomprive.com as an outperformer in the fashion sector, up 0.8 per cent. Internet-only retailers are seen as more insulated from the drop in confidence.
"Companies that retail over the web could outperform," said Clairinvest fund manager Ion-Marc Valahu.
Outside the retail and travel sectors, European stock markets were broadly resilient, with the attacks seen as strengthening the case for the European Central Bank to provide further monetary stimulus when it meets next month.
The pan-European FTSEurofirst 300 index edged up 0.2 per cent to 1,460.76 points, with France's CAC down 0.1 per cent.
Energy stocks were the leading sectoral gainers, rising 1 percent. Stronger early gains were made as crude oil prices edged up after France carried out large-scale air strikes on Islamic State in Syria.
However, the sector remained positive even as oil prices turned negative, with some traders saying there was value in a sector which is down around 20 per cent since April.