Markets slide on Trump and terror concerns - as it happened

European markets open lower after Wall Street suffers second biggest drop of the year, with airline shares among biggest fallers

2.09pm BST

The terror attacks in Barcelona and continuing concerns about Donald Trump's presidency have put stock markets under a fair bit of pressure on the last trading day of the week.

European markets opened lower, following the overnight lead from Wall Street and Asia.

12.59pm BST

More to watch out for next week - events at the Bank of England:

Busy week at the @bankofengland next week pic.twitter.com/dLC2r1FBT3

12.35pm BST

One of the other factors relating to investors' concerns about the Trump presidency is talk that (another) key advisor may leave. Craig Erlam , senior market analyst at Oanda, explains:

Trump has been no stranger to controversy in his short time as President but the latest entirely unnecessary and avoidable situation could prove quite costly for him. Trump has already this week been forced to dissolve his manufacturing council and the strategic and policy forum, while his infrastructure council never even got off the ground, after numerous CEO's withdrew from the initiatives due to his response to the white supremacy rally in Charlottesville, Virginia, last weekend.

The next casualty could be the most costly of the lot, with speculation growing that Gary Cohn - a key figurehead in Trump's tax reform and spending initiatives - could resign from his position as National Economic Council Director. This would be a bitter blow for Trump and be the icing on the cake of what has been a dreadful week for the President. The negativity is flowing through to the markets as well as such a move would cast doubt over whether Trump will deliver on his tax reform and spending promises in the foreseeable future, two things that have been at least partly responsible for the post-election rally in the markets.

11.29am BST

European markets are showing little signs of recovering.

The FTSE 100 is now down around 1% or 72 points, Germay's Dax is down 0.5%, France's Cac has lost 1.1% and Spain's Ibex is 1% lower. Connor Campbell, financial analyst at Spreadex, said:

There was no let-up this Friday morning, the European indices continuing to fall in the aftermath of yesterday's atrocities in Spain.

Though the likes of easyJet and IAG - which had both been down more than 3% early in the session - saw their losses reduce by a half and a third respectively, the FTSE itself only got worse as the day went on.

11.02am BST

The yen's position as a haven in times of uncertainty has helped push the Japanese currency higher against the dollar.

The combination of the latest terror attacks and continuing concerns about the stability of Donald Trump's presidency has seen the yen gain 0.5% against the dollar.

10.48am BST

Here are the eurozone construction figures:

Euro area construction -0.5% in June over May; +3.4% over June 2016 #Eurostat https://t.co/rqx06LzPaO pic.twitter.com/kGnLJhwqSe

10.25am BST

More on the fall in airline shares. British Airways owner International Airlines Group and low-cost carrier easyJet are both down around 2%, albeit off their lows, following the Spanish terror attacks. Joshua Mahony, market analyst at IG, said:

Unsurprisingly we are seeing the airlines leading the FTSE lower this morning, in the aftermath of yesterday's terrorist attack in Barcelona. In London, Paris and now Barcelona, the terrorist attacks over recent years have taken place in the three most visited cities in Europe, with inevitable implications for numbers over the coming year. With Turkish tourism numbers finally coming back, the focus on top European cities will arguably be a bigger hit to low cost European carriers if people decide to stay away.

10.06am BST

With the Spanish attack and Donald Trump's widely-reviled response to the events at Charlottesville, last week's concerns about North Korea have been overtaken for the moment.

But ratings agency S&P reckons there is nothing much to worry about anyway. Repeating its AA rating on South Korea, it said:

Although geopolitical tensions have risen of late in the Korean peninsula, we believe a direct armed conflict is unlikely.

[North Korea] appears to have achieved significant improvements in its weapons technology in the past few months. Nevertheless, we view the likelihood of the North Korean regime provoking a major armed conflict on the peninsula to be low. This is based on our opinion that such an event would very likely destabilise North Korea politically and bring no benefit to the country.

That said, the risk of an unintended military conflict has risen from a low level. We believe the ruling elite of [North Korea] is rational and has a strong sense of self-preservation. Still, after ratcheting up tensions with little to show for it, the regime could underestimate the risks of a more dramatic provocation in the hope of winning some concessions. On the other side, the U.S. may be less patient in responding to North Korean provocations than before, now that it views the country as being close to achieving inter-continental nuclear strike capability. In this situation, a miscalculation by either side of this standoff could spark a direct military conflict.

Korea's record of steady economic growth has generated a prosperous economy, a high degree of fiscal and monetary flexibility, and a solid external position.

We are affirming our 'AA' long-term and 'A-1+' short-term sovereign credit ratings on Korea.

Related: South Korea's thirst for craft beer helps food and drink exports top 10bn

9.57am BST

Gold is not the only haven gaining ground in the wake of the latest terror attack and the concerns about Donald Trump's presidency. Arnaud Masset of Swissquote Bank said:

Investors are switching to risk-off mode, fleeing into safe haven assets. Gold reversed early-week losses, rising more than 2% since Tuesday. Demand for treasury bonds soared. 10-year German Bund yields dipped to 0.40%, while the 2-year slid to -0.71%. So did demand for higher yielding currencies such as the Aussie and the Kiwi. AUD/USD rose 0.45% while NZD/USD was up 0.50%. The Japanese yen was up 0.40%.

9.28am BST

Gold is moving higher as investors seek havens in the wake of the current uncertainties. The precious metal is up $6 an ounce to $1293, its highest level since early June.

9.16am BST

Here'e the eurozone current account for June:

#Euro Current Account at a28.1B https://t.co/iWgeVfiiuR pic.twitter.com/SKMnzcAPAH

9.03am BST

It may be a summer lull in the business world in many ways but there are still a few key events to come, so here's a quick preview of next week from IHS Markit:

Next week's economic diary includes the flash #PMI surveys for the US, Eurozone & Japan plus UK #GDP. Read more here https://t.co/53Tv6QHZBB pic.twitter.com/VFRkCcoAXH

8.44am BST

Here's Neil Wilson, senior market analyst at ETX Capital, on the fall in airline shares:

Airlines bore the brunt of a risk-off turn on the open, with shares in Ryanair, IAG, Air France KLM, Lufthansa and EasyJet all slumping following the terror attacks in Spain. As we've seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings. Investors are concerned that demand will fall over the rest of the year, which was already looking like it would be a tough patch for the industry.

Airlines are already dealing with a price war and several have warned about the second half. The attacks in Spain will do nothing to help and should hit earnings, although we won't know to what extent until the quarterly updates come in.

8.40am BST

The Spanish market, inevitably, is also among the losers. The Ibex is currently down 1.1%, but has recovered a little from its worst levels.

8.28am BST

It is no wonder investors are shying away from equities, says David Morrison, senior market strategist at SpreadCo:

European equities and US stock index futures have begun today's session on the back foot. This follows yesterday's sharp sell-off on Wall Street which saw the major indices log some of their biggest daily losses so far this year.

The move mimics that from last week. Back then investors dumped equities after President Trump responded to North Korea's threat to fire missiles towards Guam with a couple of bellicose tweets.

8.25am BST

Renewed worries about tourism in the wake of the Barcelona attacks have sent the European travel and leisure sector index down 1.4% in early trading.

8.04am BST

Following the Barcelona attacks, markets have opened sharply lower.

The FTSE 100 is down 0.66%, with airlines easyJet and International Airlines Group leading the fallers on fears about the effect the attacks may have on tourism.

7.59am BST

Even this early in the day, Heineken directors may well be raising a glass after the Competition Commission gave the go-ahead to the company's 403m purchase of 1,900 pubs from Punch Taverns.

There were concerns about the impact on the ranges of cider and beer supplied to pubs in 33 local areas, but the regulator has accepted Heineken's proposals to sell pubs in the affected areas.

7.38am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The recent brief revival in stock markets has come to a grinding halt, as Donald Trump's presidency descends into further confusion and the Barcelona attacks revive terrorism fears.

Our European opening calls:$FTSE 7353 -0.48%
$DAX 12140 -0.52%
$CAC 5116 -0.59%$IBEX 10369 -0.72%$MIB 21669 -0.55%

For several months US markets have managed to give President Trump the benefit of the doubt with respect to the implementation of some form of fiscal or tax reform, particularly since he appeared to have the support of the business community, and for the most part, many in the Republican Party.

This confidence appears to be slowly melting away given recent events that have taken place in the aftermath of Charlottesville, as US politics descends into parody.

Related: Barcelona attack: five suspects killed in Cambrils in second terrorist attack - latest updates