Stocks fall, gold and govt. bonds rise after Brussels explosions

Reuters: European stocks fell and investors rushed for the safety of gold and government bonds on Tuesday, after two explosions at Brussels airport killed several people and blasts at metro stations in the Belgian capital.

Travel sector stocks including airlines and hotels fell the most, pulling the broader indices down from multi-week highs as reports on the scale of the carnage in the de facto capital of the European Union unfolded.

“The initial reaction in financial markets has been airline stocks all lower, and safe-haven capital flow with gold, German government bonds and the Japanese yen in demand,” said London Capital Group head analyst  Brenda Kelly.

“The news has certainly overshadowed much of the euro zone economic data this morning,” she said.

At 0915 GMT the FTSEuroFirst 300 index of leading shares was down 1 % at 1,326 points. Germany’s DAX was also down 1 % and Belgian stocks were down 0.8 %. These indices had earlier been down twice as much.

The STOXX Europe 600 Travel & Leisure index was the top sectoral faller, down 2.2 %. Shares in major European airlines like easyJet and Air France-KLM were down as much as 4 %, and hotel company Accor also fell 4 %.

Gold rose 1 %to $1,255 an ounce, and the yield on benchmark German government bonds fell to a two-week low of 0.18 %. U.S. Treasury yields fell 2 basis points across the curve .

In currency markets the Japanese yen, often considered a something of a safe-haven asset, rose across the board, notably against the euro. The euro was last down 0.6 % at 125.10 yen and the dollar was down 0.3 % at 111.60 yen .

The single currency fell a third of a percent against the dollar to $1.1205.

U.S. stock futures pointed to a fall of around a third of one % on Wall Street.

Earlier, Asian stocks seesawed as hawkish comments from U.S. Federal Reserve officials clouded the monetary policy outlook less than a week after Fed Chair Janet Yellen had set out a more cautious path to interest rate increases this year.

The dollar got a mild boost from the suggestion that interest rate hikes could be on the way sooner rather than later.

It was a rare day of stability in oil markets, with U.S. crude futures unchanged at $41.53 a barrel and Brent crude also flat on the day at $41.60.