European markets dragged lower by airline stocks following Barcelona terror attack

European markets slumped into negative territory on Friday (18 August) following a terror attack in Spain, dragged lower by airline stocks.

At least 13 people were killed and 100 more injured after a horrific attack in Barcelona's Las Ramblas tourist hotspot on Thursday.

Spanish authorities also said they had foiled a "second terrorist plot" in Cambrils, 100km from Barcelona, killing five perpetrators in a shootout.

At 10:42am BST, the FTSE 100 was down 1% or 71.20 points at 7,319, while the midcap FTSE 250 was 0.79% or 156.38 points at 19.616.70.

Predictably, airline stocks bore the brunt of the sell-off. Budget carrier easyJet's shares were down 2% or 26p to 3,793.50p, while British Airways and Spanish airline Iberia's owner International Consolidated Airlines Group's (IAG) stock was 1.92% or 12p lower at 612.00p.

Hotelier InterContinental Hotels Group also saw its shares drop 1.45% or 58p to 3,930p.

Away from the blue chips, budget carrier Wizz Air was down 2.48% or 71p at 2,795p while Flybe shed 1.22% or 50p to 40.50p.

Elsewhere, Irish budget carrier Ryanair, a major player in the Spanish market, was also 2.12% or 40c lower at €18.51.

CMC Markets analyst David Madden said geopolitics was the primary intraday driver: "Stocks in Europe are lower as the overnight sell-off in the US spilled over to this part of the world. The combination of political uncertainty in the US and security concerns in Europe are weighing on investor sentiment."

Rebecca O'Keeffe, head of investment at Interactive Investor, agreed the Barcelona atrocity in tandem with political uncertainty stateside was weighing on traders' minds.

"European equity markets are catching down with events on Thursday, opening lower across the board, with travel and leisure stocks under particular pressure. The Barcelona attack is just one catalyst causing investors huge concern.

"The markets had originally given US President Donald 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 US politics is more divided than ever."

Away from the London market, major European indices also headed lower. At 10:46am BST, Madrid's IBEX was down 0.91% or 95.40 points to 10,348.40, while Frankfurt's DAX was 0.59% or 72.27 points lower at 12,131.19.

The Paris CAC 40 was 1.01% or 51.95 points lower at 5094.90 and Amsterdam's AEX fell 0.93% or 4.87 points to 518.84.