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Paris Attacks Will Cause Short Term Shaking In Global Markets

paris attacks 2015France was rocked on Friday night by terrorist attacks in the city of Paris after Islamic militants targeted seven spots including a football stadium where the French Prime Minister was in attendance watching a friendly game between France and Germany.

The attack which was described as the worst terrorist attack in France’s history resulted in the death of 129 people and left more than 300 people in a critical condition. The terrorists used a combination of automatic weapons and suicide vests to create as much damage as they possibly could.

The Prime Minister who was supposed to attend the G20 summit in Turkey has cancelled his visit in order to be with his people in this critical hour and has stated that these attacks were an ‘act of war’ and promised that France would be ruthless in their response.

The terrorist attacks are bound to shake global markets in the short term as there is a lot of uncertainty surrounding France’s response and the support it will get from its allies. Market analysts are confident that these attacks will not have a long term impact or a strong market reaction.

Eiji Kinouchi, chief technical analyst at Tokyo’s Daiwa Securities stated that if these attacks had to happen during normal trading hours, then it could have created panic and caused the markets to fluctuate. However, since the attacks happened on Friday night, the markets have had time over the weekend to process all this information and is confident that global markets will not have a lot of shedding when they open on Monday.

In a statement, Shane Oliver, chief economist and head of strategy at Australia’s AMP Capital said

History will tell us that if the economic impact is limited – and I think it will be – that markets will quickly recover and go on to focus on other things.

Analysts believe that the biggest impact of this terrorist attack will be on the tourist sector in France and travel companies must prepare to take a hit. France currently has the most number of tourists in the world and generates around 7.5 percent of the GDP.

The chief investment officer and president of Cabot Wealth Management in Salem, Massachusetts, Robert T. Lutts stated that once the investigation turns up more information and France decides on its response to these attacks, the global tourist industry might have to brace itself for a decline in revenue and share prices.