The unpleasant events that took place in Barcelona, with the balance of more than 13 deaths, may have some repercussion on the equity markets of Western countries. In fact, at the close of Friday the main stock indices almost 1% were left. Although the incidence of this act of terrorism may be rather small. But it is due to another series of facts that have to do with financial markets. For example, a correction to the increases generated during this week in the main international markets.
In any case, it should not be forgotten that these kinds of events are reflected in the stock market when shorter term. To stabilize in the medium and long, as has been seen in recent events that have taken place elsewhere. Where the equity markets have had a very similar behavior. With an impact on the price quotation in the moments most immediate to the development of the fact, for a few hours to stabilize in its quotation. But in this case, coinciding with a weekend, we will have to wait to see how the financial markets open next week.
In any case, there will always be more values than others that are affected by this event. And therefore more vulnerable to suffer greater price volatility. In some cases, even more virulently, as can happen with tourism companies that are listed on equity markets. However, there will be no choice but to wait a few hours to check the response of the stock market to these events that have taken place in the beautiful capital of Catalonia.
The stock market goes down after the attack
The financial markets of the old continent closed a few minutes after this unpleasant news occurred. As a consequence of this particularity not a very reliable move in the response starring the markets. Especially since the full gravity of the news is not known and that it would be confirmed a few hours later and with the markets already closed until their opening next Monday. Day that will be the best thermometer to check what is the real impact of this terrorist act in the always complicated world of money and investment.
It is true that national equities fell more than the rest. Because in effect, while the average of the losses in these markets has been very close to 0,50%, in the Spanish the percentage was somewhat higher. Specifically, almost 1% was left black Thursday. Now it remains to check the reflection made by the financial markets during the weekend. And if the next week is transplanted to the positions of buyers and sellers. To show which of the two forces prevails in this dramatic combat of the financial agents.
The most sensitive tourist values
Undoubtedly, it is the values linked to tourism that are most affected by these sad events. Because the main repercussion that these attacks have is on tourist flows. As a consequence of this trend, with the airlines, hotel accommodations, reservation centers and travel agencies those who may fear the most for their positions in the equity markets in the coming days. With a high percentage of their prices depreciating, although it is expected that it will not be with great intensity. But on the contrary, it is formalized as a slight and punctual correction in its prices.
Well, these possible corrections in their prices could be used by small and medium investors to reinforce their presence in these values of the Spanish stock market. Because the most normal thing is that in the middle of this week they could return to the trend prior to the development of this Islamist attack in the center of Barcelona. In this sense, it can serve as a true business opportunity rather than as an operation to undo positions. Especially in tourist stocks that already maintained a very bullish uptrend and clearly defined in the charts developed by investors.
Actions benefited
On the contrary, there are also other series of stocks that could experience a slight bull run as a result of these events. We refer mainly to listed companies that are linked to the armaments and security companies. To the point that their prices could appreciate under a more than important intensity. However, there are practically no values of these well-defined characteristics in national equities. Therefore, investors would have no choice but to head to international markets to buy shares of these very special values.
It is specifically the usa stock exchange where most of these proposals are concentrated in equities. Where it is configured as one of the stock market sectors with the greatest specific weight and that attracts millions of investors every day. However, the formalization of this new investment strategy will imply a greater outlay in the operations carried out. As a consequence of the increase in commissions generated by these movements in the international financial markets. The European stock markets also show an acceptable presence of these values, although without the strength that Wall Street offers you at the moment.
Currency volatility
Another of the most relevant consequences of this news that the month of August brought us is that greater tension may be generated in some of the main world currencies. In this sense, special attention should be paid to movements of the euro and the US dollar. Not surprisingly, certain movements could be generated with which you can make the savings profitable during these days. Although in any case, they will be very fast movements and will require that you have well-prepared reflexes to open and undo positions with great flexibility and speed in all movements.
In any case, it is not an investment suitable for all small and medium investors. But rather the opposite, since you must contribute significant experience in operations with these peculiar financial assets. And of course with an increase in the financial culture that you must contribute from now on. If this is not the case, you better give up this kind of operation and focus on those that you have assimilated and with which you have more experience. You cannot forget that the currency market is very special and you must provide a series of characteristics to operate correctly in these international markets.
Investment tips
In any case, you can apply a very well-defined line of action to optimize operations in these days of August. So that in this way, you are in the best position to benefit from the general scenario that the different financial assets influenced by the terrorist attack in Barcelona may present. To facilitate this task, you will have no choice but to apply some of the recommendations that we present below.
- The financial assets affected will be under a very limited period of time. Therefore it is assumed that it will not last more than a few days, even in a few hours. Where speed will be one of the keys to improve your positions in the financial markets.
- Refrain from carrying out operations in more sensitive values to these dramatic events. You will have more time to buy this class of shares and without as much pressure as happens at the moment.
- You should be especially careful in case there are more terrorist replicas in the coming days. Because in this case, the repercussions on the financial equity markets would be more serious and with more dangerous effects for the defense of your assets.
- One of the best strategies is to wait a few days to see what the real evolution of equities. So that you can carry out any operation on the stock market with greater guarantees. Without improvisations that you can pay very expensive with serious losses in your portfolio.
- These are not the best days to open positions in equities. Another very different thing is if you are already bought in the markets. It won't be worth undoing the positions because the effects can be totally the opposite of what you are looking for at the moment. You better wait just a few days.
- This is not something that only affects national stock markets. But all international places are involved. Because in effect, you cannot forget that it is a serious global problem, not a local one. It is something that you should value when considering your investments.
- And finally, you should not forget that this is a scenario with which equity markets will have to coexist from now on. Even to carry out any kind of strategies to operate on the stock markets. Not surprisingly, it is a situation that will most likely be repeated more times from now on. It is a new reality for the stock market.