July 15, 2016 / 4:04 PM / 2 years ago

Travel stocks fall after France attack, weigh on European shares

* Swatch shares slump after profit warning

* Richemont shares also dragged lower by Swatch (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

By Sudip Kar-Gupta and Alistair Smout

LONDON, July 15 (Reuters) - The shares of European travel and leisure companies fell on Friday, weighing on the region’s stock markets, after an attack in the French city of Nice that killed more than 80 people.

A gunman at the wheel of a heavy truck ploughed into a crowd celebrating Bastille Day late on Thursday, killing at least 84 people and injuring scores more in what French President Francois Hollande called a terrorist act.

The pan-European STOXX 600 index slipped 0.2 percent, with France’s CAC equity index down by 0.3 percent.

The STOXX Europe 600 Travel & Leisure index dropped by around 1.2 percent.

French hotels operator Accor, Europe’s largest hotel group, fell 3 percent, while shares in airlines such as Air France-KLM, easyJet and Thomas Cook dropped by between 1.6 and 4.2 percent.

“Recent experience suggests the initial sell-off will be short-lived but the potential damage to traveller confidence is a clear negative for affected firms,” said Jasper Lawler, market analyst at CMC Markets.

“This is especially true in France where there is already concern that the drop in Sterling will impact tourism from the UK.”

Another Paris-based analyst said the attack in Nice would deal a new blow to French hotels and tourism companies, which had only just started to recover after Islamist militant attacks in Paris on Nov. 13, 2015, which killed 130 people.

“Hotels and restaurants have barely recovered from a difficult period. This is a new blow, especially in summer,” said the analyst, who declined to be named.

Shares in Swiss luxury goods companies Swatch and Richemont also slumped after Swatch issued a profit warning.

Swatch shares tumbled 7.8 percent while Richemont shares fell 3.1 percent.

The pan-European STOXX 600 index is down by around 7 percent this year. (Additional reporting by Raphael Bloch in Paris and Atul Prakash in London)

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