Global shares, euro fall, oil and gold up after Paris attacks

Futures showed that US stock markets were set for small gains.

Michael Hewson, chief market analyst at CMC Markets, said: “While not wanting to second-guess the effect of the events of the weekend, the closure of France’s borders, along with other security measures, the impact on consumer confidence could well be considerable in the coming days and weeks”. European bourses were trading narrowly mixed at midday. Investors bid up shares in telecommunications companies and defense contractors.

The late-night assault on Friday in French capital, which killed 129 people, sparked concerns about security in Europe and its impact on the already struggling eurozone economy.

“It’s not something that’s going to throw the European economy into recession”, he said. “The small upside we’re seeing in the S&P 500 is reflective of that”.

Analysts say the Paris attacks make it even more likely that the European Central Bank will expand its stimulus program at the conclusion of its December meeting.

However, market worries proved short-lived and gold pared gains as investors renewed their focus on expectations the Federal Reserve will raise USA interest rates in December.

“At this juncture, it is easy to see that the Fed’s intentions to “normalize” monetary policy could be derailed by a combination of adverse domestic economic and external events”, said Neil MacKinnon, global macro strategist at VTB Capital. Energy has been the biggest laggard among industries this year, down 15.4 percent, as the price of oil has continued to slump.

Some of the biggest French companies trade on the Euronext Paris exchange, including KLM-Air France, LVMH, AXA, BNP Paribas, Societe Generale, L’Oreal, Carrefour, and Total. The index was last down 0.04 percent.

OIL: Benchmark U.S. crude oil climbed $1, or 2.5 percent, to close at $41.74 a barrel in NY. Brent crude, used to price worldwide oils, fell 24 cents to $44.23 a barrel in London.

MSCI’s all-country world index fell 0.1 per cent, while the pan-European FTSEurofirst 300 index edged up 0.09 per cent.

The prospects of stepped-up military action to counteract terror threats helped give defense contractors a boost.

Spot gold added about 0.5 percent to $1,089.51 an ounce, moving away from its low on Thursday of $1,074.26, which was its deepest nadir since February 2010.

France’s CAC index closed down 0.08 per cent, weighed by declines in tourism-related stocks. Australia’s S&P/ASX 200 lost 1 percent to 5,003.80. Starwood slid $4.69, or 6.3 percent, to $70.30. The euro was down as much as 0.5% against the dollar in Monday trading.

The dollar slipped about 0.1 per cent against the safe-haven yen to 122.43, while the dollar index, which tracks the greenback against a basket of six major rivals, was broadly flat at 99.082. Japan’s Nikkei 225 gained 1.2 percent to 19,630.63 and South Korea’s Kospi rose 1.1 percent to 1,963.58. Hong Kong’s Hang Seng fell 1.6 percent to 22,035.11 while the Shanghai Composite inched back up 0.2 percent to 3,588.16.

Retail sales were weaker than expected and producer prices slipped for the second straight month, but USA consumer sentiment beat forecasts and rose for the second straight month. The dollar rose to 123.06 yen from 122.72 yen and the euro fell to $1.0720 from $1.0740.