Share prices skid, oil and gold soars in panic buying on London

LONDON -- Shocked investors sent European share prices sharply lower and panic buying caused oil and gold prices to soar Tuesday in response to the terrorist attacks in the United States.

The London Stock Exchange evacuated its headquarters in the city's financial district as a precaution, but a spokesman said trading continued at an undisclosed alternative site.

The International Petroleum Exchange suspended trading of crude oil and refined products for an hour to catch up on an unusually heavy volume of transactions, while gold trading fizzled earlier in the afternoon.

Investors dumped shares on all major regional stock markets, and stocks already battered from several days of heavy selling plunged further through the afternoon.

Among the biggest losers were stocks in insurance companies and airlines, after hijacked passenger planes plowed into both towers of the World Trade Center.

"It's a disaster. It throws the whole market background into chaos ... Banks, insurers will fall the most -- anything that's exposed," said Mike Lenhoff, a portfolio strategist at London brokerage Gerrard.

"The tragedy postpones recovery and continues to put pressure on corporate profits," he said.

The FTSE 100 index of British blue chip shares closed down 5.7 percent from Monday's close. British Airways, which canceled its remaining flights to the United States after the attacks, fell 21 percent.

The DAX index of leading German shares closed down 8.5 percent, and the Paris Stock Exchange's CAC 40 index tumbled 7.4 percent.

The Mib30 index in Milan, Italy, fell 7.7 percent, to a nearly three-year low. Trading of 10 Italian stocks, including Pirelli, Telecom Italia and Banca Fideuram, was suspended after they neared a loss limit of 10 percent for the day.

European insurance companies, some of which would face damage claims from the attack, fell sharply in Europe. In Zurich, Swiss Re shares fell 13 percent, Baloise dropped 11.1 percent and Swiss Life 7.8 percent.

The world's largest reinsurance company, Munich Re of Germany, could face large claims, but was "adequately prepared to bear such events even of this dimension," spokesman Rainer Kuppers said.

Contracts of North Sea Brent crude oil for October delivery shot up $3.60 to $31.05 per barrel on the International Petroleum Exchange before it suspended trading for an hour, then settled to finish at $29.06.

The IPE took 110,378 orders before it suspended trading in mid-afternoon -- far more than the 70,230 orders placed all day Monday, spokeswoman Jenny McLaughlin said.

Gold surged, but trading thinned after the Comex division of the New York Mercantile Exchange closed in the United States.

The London Stock Exchange evacuated its headquarters in the heart of London's financial district, but trading continued at another location. Officials would not say how long the exchange would operate there.