* Travel sector stocks fall the most
* Gold, yen and Treasury bonds in demand
* Blasts overshadow economic data
By Jamie McGeever
LONDON, March 22 (Reuters) - World stocks fell and
safe-haven gold and government bonds rose on Tuesday after
attacks on the airport and a rush-hour metro train in Brussels
that triggered security alerts across western Europe.
Travel sector stocks including airlines and hotels fell the
most, pulling the broader indices down from multi-week highs,
although stocks had clawed back some of their losses by midday
and bonds and gold eased back from their earlier highs.
U.S. futures pointed to a fall of almost half of one percent
at the open on Wall Street ESc1 .
"It is all to do with the events in Brussels ... but the
reaction is muted, which also shows that after all the terrorist
attacks we have seen, markets have learned to live with these
kind of things," said Rabobank euro zone economist Emile Cardon.
At least 26 people were killed and many injured in the twin
attacks on the Belgian capital, which took place four days after
the arrest there of a suspected participant in November's
militant attacks in Paris.
At 1220 GMT the FTSEuroFirst 300 index of leading shares was
down 1 percent at 1,326 points .FTEU3 . Germany's DAX was down
0.5 percent .GDAXI and Belgian stocks were down 0.4 percent
.BEL20 . These indices had earlier been down as much as 2
percent.
The STOXX Europe 600 Travel & Leisure index .SXTP was the
top sectoral faller, down 2 percent. Shares in major European
airlines like Ryanair RYA.I and Air France-KLM AIRF.PA were
down as much as 4.5 percent LHAG.DE , and hotel company Accor
ACCP.PA was down 3.5 percent.
The federal prosecutor said at least one of two explosions
at Brussels airport was likely to have been caused by a suicide
bomber and the attacks brought some cross-border transport to a
halt, including trains from London to Brussels.
Gold rose 0.6 percent to $1,255 an ounce XAU= , having been
up around twice that earlier. The yield on benchmark German
government bonds fell to a two-week low of 0.18 percent before
edging back to 0.21 percent EU10YT=RR . U.S. Treasury yields
fell 2 basis points across the curve US2YT=RR US10YT=RR .
In currency markets the Japanese yen, regarded by investors
as a shelter from turbulence, rose across the board, notably
against the euro. The euro was last down 0.5 percent at 125.25
yen EURJPY= and the dollar was down 0.3 percent at 111.60 yen
JPY= .
The single currency fell a fifth of a percent against the
dollar to $1.1220 EUR= .
ATTACKS OVERSHADOW DATA
Liquidity had already been starting to dry up ahead of the
Easter holiday and investors were beginning to think about
cashing in on a steep rally in stocks over the last few weeks.
"Coming up to the Easter holiday, people are going to be
very reluctant to put more money into these (stock) markets. If
anything, they will be more likely to take money out," said
Michael Hewson, chief market strategist at CMC Markets in
London.
"Anything like the events we're seeing in Brussels this
morning is going to weigh on risk sentiment and risk appetite."
Investors paid little attention to data showing a slight
pick up in German business morale and euro zone business
activity in March.
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 come sooner rather than later.
Japan's Nikkei stock index .N225 added 1.9 percent,
closing at a one-week high, after markets in Tokyo reopened
after a public holiday on Monday. A weaker yen overnight had
given a tailwind to local shares.
Elsewhere, sterling was one of the biggest losers among the
major currencies after ratings agency Moody's said Britain's
credit rating will be put under pressure by a marked slowdown in
fiscal consolidation unveiled in last week's budget.
The warning came amid concerns about Prime Minister David
Cameron's ability to keep Britain in the European Union after
leading 'Out' campaigner Iain Duncan Smith resigned from the
cabinet late on Friday.
Sterling was last down 0.6 percent at $1.4281 GBP= , more
than two cents off Friday's one-month high of $1.4514.
In oil markets, U.S. crude futures fell 1 percent to $41.11
a barrel CLc1 and Brent crude LCOc1 shed 0.75 percent to
$41.23.
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Shanghai CSI 300 and global effects interactive https://t.co/YqIYLIbInP
Chinese A-shares vs developed and emerging stocks http://link.reuters.com/rac25w
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