Terrorist shockwaves hit market

Shockwaves from the attacks on the World Trade Center in New York have reached the Australian financial markets, with the Australian All Ordinaries plunging more than four per cent within two hours of trading.

Insurance, banking and aviation stocks appear to be the worst hit stocks, while News Corp plunged more than seven per cent and Qantas dropped 32 cents to trade at $3.12 at 11.40am.

Australian banks suffered losses in share price of between 2 and 3 per cent.

However, some stocks seemed to gain after the crisis, as predicted by many economists throughout the world, notably in oil and gold prices. Gold shot up US$9.75 to $288 per fine ounce in Sydney trading, and Woodside Petroleum rose 8 cents to $13.64 within an hour of trading.

Insurance group QBE insurance suffered a nine per cent fall in its share price, but it has said it expects its exposure to groups directly affected by the terrorist attacks will be protected by reinsurance.

Shocks will also be felt throughout the Australian financial services community, particularly companies with offices in the two World Trade Center towers which collapsed after the attacks.

Investment and trading giantMorgan Stanleywas worst hit, with a major office in the southern Tower 2 office. The company issued a statement on its Web site this morning which said that it had limited information on the tragedy apart from what was reported on news bulletins.

“Some 3,500 people working for Morgan Stanley's individual investor businesses were based in the World Trade Center complex. We are working diligently with local authorities, and we will keep you apprised of developments…

“…We want our clients to know today that in spite of this tragedy, all of our businesses are functioning and will continue to function. We are committed to resume full operations as exchanges and markets reopen. All our clients should rest assured that their assets are safe and our Financial Advisors will soon be in contact with our individual investors to answer questions and address their concerns,” the announcement read.

Other notable financial services organisations reportedly housed in the two towers wereABN-AMRO,AON Corporation, Dow Jones & Company and Oppenheimer Funds.

AON Corporation had about 1,100 people working in its offices in Tower 2, the second tower to be hit. They were based on floors 98 to 103 which were above where the plane hit.

Earlier today, Stewart Fotheringham, managing director of AON Consulting in Australia, said he had very little information at this stage. He said AON had set up a hotline for families of people working in the building.

Asked if it were true that about 150 AON employees had been accounted for so far, he said: "That's one story I've heard."

However, he added it was unlikely that the tragedy would have an effect on business in Australia as AON's headquarters are in Chicago.