As fears fade that Monday’s plane crash in New York was not the work of terrorists, markets have rebounded. But the crash could not have come at a worse time.
Flying on empty
Markets plunged just minutes after news of another plane crash in New York, when speculation about another terrorist attack reached its peak.
Germany’s Dax-30 leading share index plunged 200 points, although the index managed to reduce its loss to 90 points at the end of the session.
Shares in Lufthansa, which shed 11% immediately after the news of the crash, still closed down 4% lighter.
Although there was no initial indication that Monday's crash was another terrorist attack, the fear of investors is that the latest events will further damage the public's confidence about the safety of flight.
Insurance business reeling
The insurance industry is bracing itself for the biggest round of claims ever apart from the attacks of September 11. Among insurance stocks, losses ranged between 2% and 3%.
According to one broker, a combination of losses on the ground and claims relating to passengers would lead to settlements totalling "hundreds of millions of dollars".
Insurance premiums are set to rise sharply as a result. It is as yet unclear how the industry would cope in the event of another terrorist attack on an airliner.
Travel industry under pressure
Confidence seemed to be returning to the travel industry. Although bookings were still well below usual levels, agents were starting to present a more upbeat picture for the coming year.
Advertising campaigns featuring President George W. Bush seemed to be working and passenger numbers were rising again. Monday’s crash of American Airlines flight 587 has dealt a further blow to the ailing industry.
Tourism group Preussag tumbled as much as 11% intraday before closing down 2.5%.
Aviation analysts said that Monday's crash will lead to yet further cancellations in air travel, adding to the woes of the already seriously battered industry.