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Travel Stocks Fall After Bastille Day Attack

Airline and tour operator shares have fallen as investors digest the implications for the sector of the latest terror attack.

EasyJet (Other OTC: EJTTF - news) was the biggest faller on the FTSE 100 with a drop of 2.6%, while Flybe closed down 3.1% and British Airways owner International Airlines Group was off by 0.9%. Cruise ship operator Carnival (LSE: CCL.L - news) fell 2.3%.

TUI - the company behind Thomson and First Choice - was 1.1% lower, while in the FTSE 250 Thomas Cook (Xetra: A0MR3W - news) was down 4.2%.

Elsewhere, shares in French hotels operator Accor (EUREX: 485822.EX - news) fell 3% while Air France-KLM (LSE: 0LN7.L - news) was 1.6% off.

Despite the falls, it was a calmer day for the wider market following another busy week as investors reacted to the latest implications from the Brexit vote, including the Bank of England's decision to hold off on a rate cut.

The FTSE 100 closed 0.2% higher while other European indices were also little changed.

The lorry attack in Nice (Milan: NICE.MI - news) was the latest to knock investor confidence in the holiday sector - an industry about to embark on its busiest time of the year with school summer holidays set to peak in Europe.

:: Massacre In Nice: Truck Drives Into Crowd

Witnesses described how crowds, who had been watching a Bastille Day fireworks display, ran for their lives as French nationals and holidaymakers were mown down by the vehicle.

Earlier deadly attacks in Egypt, Turkey, France and Belgium had similar effects on share prices - which remain under pressure over fears that slowing economies will further hit demand for foreign travel.

British Airways confirmed last month that it had no plans to resume flights to Sharm el Sheikh this coming winter despite Egypt insisting its security had been improved since the bombing of a Russian passenger jet last year.

Other operators have kept their options open, but said they will only resume services once Government travel advice allows.

Sharm - once a popular winter destination for Europeans - has been likened in recent times to resembling a ghost town amid a collapse in the country's wider tourism industry.

A report last week, in the wake of the UK's vote to leave the EU, claimed the referendum had already resulted in UK consumers adjusting their summer holiday plans abroad, with 3% even opting to cancel.

Travelzoo (NasdaqGS: TZOO - news) also warned of higher costs ahead in the price of holidays as operators faced the prospect of the effects of a weak pound.