16/11/2015 BBC Business Live

This is Business Live from the BBC with Ben Thompson and Sally Bundock.

Solidarity with Paris - a grieving city returns to business

and the stock market opens as usual, but investors search

Live from London, that's our top story, today, Monday November 16th.

Worries grow over the impact the Paris attacks could have

on France, with tourism and consumer spending likely to be hit.

A big blow to Abenomics - Japan slides back into recession

And we'll have a full round up of the global business pages, looking

at the economic impact of the terror attacks in Paris talking to our

correspondents in the French capital and here in the studio about the

longer-term implications for France and Europe.

do get in touch with us with your comments - you know what to do,

has been a big drop at the open - Paris stocks fell 1.1% at the

opening bell, but most analysts agree that the reaction will be

Public transport should be running as normal today in France -

Museums and some other attractions will also open as usual,

but more vulnerable sites, such as the Eiffel tower will remain closed,

as will Disneyland Paris, which will remain closed until Wednesday.

Virginie Maisonneuve from Maisonneuve Global Advisors is with

Thank you for coming in. This has enormous poignancy for you because

the places that were attacked on Friday, the places that you used to

go to in your youth? Absolutely, the Bataclan is the place where young

people go to listen to music, those little cafes, it is part of the

Parisien and French lifestyle in general. In terms of the impact of

all of this, you were looking into all of this prior to Friday, you had

put out new research about the impacts of these kinds of events.

Talk us through your thoughts in reaction to what happened on

Friday? Clearly beyond the human tragedy, which we must acknowledge,

it is important to think about the impact on the economy and

geopolitics. To me, there are four very important points to study. One

is psychological impact. When does the human psyche, if you will, take

a series of independent events and create a pattern out of it? Clearly

this is after Beirut, Turkey, the Russian plane, so there is a

question Mark there. If there was eight psyche shift, it would impact

business and consumer confidence, which would have an impact on

economy. You also talk about the geopolitical element, which is

important with the uber project, but this could bring people together and

solve some of the problems we have seen? -- the euro project. We have

seen it in terms of discussion at the G20, some of the announcements

made yesterday in terms of fighting against financing of terrorism,

bringing people together, and I would say not only within Europe but

so far there has been a loose association in terms of tackling the

issues, possibly Russia, the US and Europe being more aligned, and

clearly with the intervention of France in Syria yesterday possibly

discussions took place before that, so geopolitics is very important.

The other factor that is important is macroeconomy and clearly there is

a direct way to look at this, which is, what is tourism overall, what

does it mean for the economy? Tourism and related activity is

about 10% of the world GDP, a large industry and also a large employer,

with over 270 million jobs around the world. With regards to France,

it is about the same, 9% of GDP, so you can see if we had another event

or if, again, the consumer and business psyche thought we would

have more of that and we had a ship, it could have an impact on the

economy, and that is important. What is your gut feeling about this? Do

you think it will have a long-term impact or actually it will be a

short-term situation, a knee jerk reaction? The fact it happened late

Friday after European markets closed was significant in that there was no

immediate reaction, there has been the weekend for rational thinking to

set in. There definitely will be a long-term impact. Some of them will

be the same way that 9/11 had impact. The way we think about

communication, corporation, definitely. In regards to the US

monetary policy it might have an impact depending on how markets

behave between now and December because Janet Yellen has made it

clear she wanted a relatively stable global environment for US rates to

go up, so I think that is more medium term, but I think definitely

will have an impact. We appreciate you coming in and giving your

analysis of the situation you. You can see it on the screen there,

Paris stock market down about 40 points.

Japan, the world's third-largest economy, has slipped into recession.

Personal consumption in the country remains positive, but there was weak

corporate investment blamed on concerns for the global economy and

It puts policymakers under further pressure

to deploy new stimulus measures to support a fragile recovery.

China's President Xi Jinping says he expects the country's economy

Xi's remarks were made at the G20 Summit in Turkey.

Beijing has already rolled out a raft of support measures since last

Let's look at the Business Live page online, keeping across all of the

business stories. We are focusing on events in Paris and the implications

on the French economy and Europe, but there are other business stories

out there. Just imagine on the Business Live page, our

correspondent based in Paris and elsewhere covering the event as they

happen. This is Lucy Burton posting earlier today from Paris. But if you

want to keep across other business stories and events taking place,

companies like Majestic Wines, the Japanese recession, and also MTM, a

big South African mobile operator, the biggest in South Africa, in

trouble with regards to a fine it has to pay today, the deadline has

been extended to give some breathing space. Lots of stories there for you

to die just when you have time. Let's cross to

our Asia business hub as markets Not least because of the Paris

attacks, but also news that Japan is Talk us through these two issues

weighing on the stock market and the minds of investors today?

The Asian markets were down after the deadly attacks in Paris. We saw

the benchmark Australian index closing down almost 1%, and in South

Korea the index finished down 1.5%. Korea the index finished down 1.5%.

The Hang Seng in Hong Kong fell by a similar mark, 1.7%, and indicate

also closed down 1%. Market analysts have said they expect the attacks

have a sharp but short lived effect and that longer term investors will

stub looking towards what happens with the slowdown in China and with

the US Federal Reserve, whether it will raise interest rates next

month. The other big economic news in Japan was the preliminary GDP

data saying the country was in a technical recession. The Japanese

economy shrank 0.8% in the last quarter, following a contraction of

0.7% the previous quarter. This is the second time the economy has

fallen into recession since Prime Minister Shinzo Abe came to power,

and it raises serious questions about his aggressive economic

policies and whether they are working.

Thank you for talking us through that.

So confirmation of what was expected.

Asian markets ended down - after the terror attacks in Paris

unnerved investors, on top of the news that Japan had

slipped back into recession for the second time in two years.

Airline stocks taking a beating on concerns over the tourism industry.

A big player in France, we will talk about that more in a moment.

But whilst there are falls, most investors don't expect this to

The CAC 40 down there. But what does it mean for the state of your risen

economies? Investors are temporarily looking for safe havens, somewhere

to put their cash, including in the dollar, gold, the Japanese yen, we

have seen that through the course of the day, but that is the current

state of play on the markets. We will keep a close eye on those for

you. Jeremy Stretch is Head of FX

strategy at CIBC. Ben was running through the markets,

the euro down, the dollar, it is what we would expect at this point?

It is, you would expect in a period of risk and uncertainty, which we

have clearly seen over the weekend, generally equity sentiment markets

will sell off, some safer havens, ironically the yen often seen as

that despite the GDP downgrade, generally it performs well so we are

seeing the traditional market reaction you would expect at this

stage of the session. As ever, lots of reaction in the press, social

media, everywhere about the impact this will happen. Your thoughts? As

your previous guest was talking about, there is an impact on

consumer spending, airline stocks in terms of equity markets. The real

immediate reaction is in terms of sentiment, how that plays out. If we

get further volatility in equity markets then it has enormous

implications for global model triple as a, including the Federal reserve

in December, but we have to be careful about extrapolating that

after just a few hours of the first session of the week. All of these

are different elements, I touched on it there with the market boards, of

how governments will react, what it means for things like monetary with

the state of the economy, numbers. They seem like just numbers and it

perhaps feels in sensitive to talk about it at this time but they are

huge issues and one that policymakers will be looking at

closely. Absolutely, and clearly we have to remember the human tragedy

that backs this up over the weekend. In essence we are trying to extract

the ramifications of that in times of economic performance and global

monitoring of the. -- monetary. The question is whether the cycle in the

US is being delayed or postponed by the events, clearly a factor we need

to consider. In September they talked about global economic

conditions, suggesting economic uncertainties were front and centre

but if we see further vulnerability, we had seen a good run in October,

but a lot of fragility starting to come back in, and we overlay that

with the commodity markets, the oil price under pressure in the last few

sessions, there is a big infantry overhang, and it was the question

about demand going forward it would start to imply that the oil price

could fall further, which has enormous invitation for those

producers and the countries. Thank you very much. Jeremy will

return in about five minutes as we look at what is being discussed in

the papers and on social media. We will be looking at what the

papers say about the attacks on Friday in Paris and as concerns

about about the economic impact we will look at what it would mean for

Europe's Academy. -- what it could mean for Europe's economy.

You're with Business Live from BBC News.

Here in the UK, the Prime Minister, David Cameron, has announced a big

increase in funding for the security services in response to the threat

There'll be more money for our intelligence agencies,

Our business correspondent Simon Jack joins us. Let's look at

UK reaction. You will see from here, that's the FTSE 100. It is green. It

is up. It is the only one up. The rest of the European markets are

dourngs but not by much. The UK -- down, but not by mush. The IAG which

owns British Airways, airline stocks have been affected, but not very

much reaction and this is typical. We have seen this before in Madrid,

and we saw it in the 7/7 bombings in London. Short-term little hit and

people recover quickly. This one is different in the sense the UK is

isolated because it is not part of the Schengen group. This moment

comes at a very sensitive time for the European Union. They are under

the pressure of a migrant crisis and they are wondering if their Schengen

deal is fit for purpose and there is a lot of bickering going on in

Europe and this comes at a sensitive time. David Cameron finding 1900 new

security officers to bolster his defences against this threat. I

don't know where you find 1900 spy ins a short period of time, but

maybe he know where is to get them. Extra funding for GCHQ and MI5 and

MI6. The markets are taking it in their stride.

Thank you very much, Simon Jack. More details too of events today. We

have been assessing the economic impact of events on Friday.

We have got, they are at pains to say it is business as usual in terms

of travel to and from France. The Eurotunnel is open. It could take

longer, French borders controls are tightening. It could take long tore

get across borders today. Online, you can see the details there. Some

other stories as well, Ben on the Business Live page.

A new Nationwide boss. Nationwide is hiring Joe Garner. We have had an

update from the CBI and its view on Europe. Details on the live page.

As France enters a third day of mourning after the gun and bomb

attacks in Paris killed 129 people and left more than 350 wounded,

resilient businesses are opening and Parisians are going to work.

The stock market has also opened as usual with stocks falling 1.1% in

The numbers have pulled back. That shows resilience. We have only

been trading for 15 minute sos far in Europe. You can see the numbers

there. Paris down a third of a percent at the moment.

Joining me now to discuss this is our Economic

Clearly the extent to which they have switched to a risk aversion is

somewhat limited, isn't it? There is a bit of concern at the opening of

trade about the potential economic impact, but the figure we are seeing

now, a third of a percent down as you say, a normal day frankly, if

you were seeing falls in the market over the day, you would regard that

as unremarkable. Also similar kind of pattern emerging in the bond

market where Government debt is trading. We are seeing there have

been some move in towards buying the ultimate safe asset in Europe which

is German Government bonds, but it is really modest and we have not

seen a great flight from the riskier assets.

This is very important, isn't it? For full confidence and for the

perception that France is able and will return to some normality. Ity?

There are potentially issues about this. The economic aftermath of

these dreadful events in terms of both supply and demand sides of the

equation, the demand question is does it affect consumer confidence

and of course, with France being the world's biggest, most popular

destination for tourists, there is an impact there. On the supply side,

there is the question of the border controls will add somewhat to

business costs for the businesses that are shipping goods or people

across borders. I suspect the impact of that will be rather limited and

perhaps confined to some particular types of businesses that are trading

locally across borders, but it is not to be discounted. The issue of

tourism is important. About 7.5% of French GDP, the issue for French

businesses, hotels and restaurants is whether people will be put off or

whether as they are hoping people will think, "We will not be bowed by

this. We will go to Paris." Tourists have in the end come back. In the

short-term, certainly, the stock market is showing the impact of that

kind of concern. Eurotunnel a little highly ago was down 4.5%, airlines

have been affected and the French hotel group was down about 6% a

short time ago. So yes, there clearly is an issue there and I

think, you know, and the big question will be just how quickly,

how durable is any effect on tourists confidence? Anna joins frus

Paris. One of our correspondents there for us at the moment. Anna, it

is a difficult conversation isn't it to have at the moment because as you

can see behind you, all the tributes, I mean Paris is a city

that's grech grieving right now and yet wanting to show strength at this

time and show that they want to get going again, get businesses moving

again where you are and the economy, but not stalled by this?

That's right. It is almost like a kind of nervous defiance. You can

see people cycling past to work. We have seen kids with rucksacks head

to go school, but so many people, we have been here since 6am this

morning, so many people have been making a detour to come and pay

their respects and lay flowers here. It has been a constant, constant

flow. We have been hearing that, well, of course, this is the third

day, the third and the final day of national mourning and other

practical things are getting back to normal too. So the public transport

is running again. Flights. Ferry services, there are delays there.

People are advised to leave extra time because of the border controls

here in place in France. The question, of course, is what

people there are telling you. We have talked about the resilience and

the attitude of the Parisance there as Sally touched on wanting to get

back to normal, but wanting to get back to normal and the normality are

two very different things, aren't they? They are two very different

things. It was interesting, when we arrived here, the day after the

attacks, we were driving down past the stadium. A minute's drive away.

There were people sitting outside a Ras rant so they are trying to get

on with their lives. They don't want to allow the terrorists to win here

and we have been hearing from department stores, one of them

opened their doors on Saturday saying that it wanted to show a will

to resist in the face of terror, but they decided to close because it was

too difficult for them and for the customers. Just looking at some of

the other major tourist attractions here. The Eiffel Tower will remain

closed indefinitely for security reasons and Disneyland Paris is

expected to re-open on Wednesday. They have been closed. A decision

was taken in support of our customers. Smaller businesses, if

you look around the square. There are lots of cafes, restaurants,

shops, and they are reopening today. Some small businesses are donating

their profits to the Red Cross in support of the 129 victims who died

here. Thank you very much Anna and Andrew.

In a moment we'll take a look through the Business pages,

but first here's what British Prime Minister David Cameron had to say to

You can't deal with so-called Islamic State unless you get a

political settlement in Syria that enables you to degrade and destroy

that organisation. It has a long way to go, but there are hopeful signs

in that the meeting of foreign ministers including the Russians and

the Iranians as well as the Americans, the British and the

French in Vienna made some progress and I hope to have positive

discussions with Vladimir Putin this morning, but even without that, we

will do everything we can to make sure we keep our people safe, but we

live in a very, very dangerous world.

What other business stories has the media been taking an interest in?

Jeremy Stretch from CIBC is back with us.

The Paris attacks will put pressure on oil prices? There is an impact.

If there is a demand shock side to global economic activity it will put

further pressure on the oil price which has been falling because of

this perception of a big oil over hang infantry and for the oil

producing economies that is another headache and that puts further

pressure and fiscal pressure on countries like Saudi Arabia where

the cost of production are low, but their reliance on the oil revenues

is increasingly significant. During the attacks, Jeremy, we saw

technology play an important role whether it is Twitter or Facebook.

Facebook opting to let people indicate to friends and colleagues

that they are safe. Airbnb being involved and Uber and this shows how

technology tirms can help in situations like this? When we see a

period of crisis we go to the news media to find information from the

BBC News Channel for example, but having that ability to communicate

via social media is hugely beneficial for those people who are

trying to seek out more information and trying to learn about loved

ones, but it provides opportunities as you mentioned about accommodation

for those that were stranded in Paris. It provides great benefits to

individuals. Thank you very much Jeremy for

coming in. You're up-to-date with the business for now. Plenty of

details across the BBC as we get updaids from Paris.

-- updates from Paris. For the other business stories we haven't had a

chance to cover today, do take a look at the Business Live page. We

will see you soon.