These sectors will be sold off following Brussels attacks

Police officers stand guard around the Zaventem Airport after two explosions went off in Brussels, Belgium on March 22, 2016.
Dursun Aydemir | Anadolu Agency | Getty Images
Police officers stand guard around the Zaventem Airport after two explosions went off in Brussels, Belgium on March 22, 2016.

Stocks in the tourism sector fell Tuesday as a result of the terror attacks in Brussels, but the decline will only be short term, according to investment experts.

The Euro Stoxx 600 travel and leisure sector slipped 1.9 percent by Tuesday midday and was the worst performer across the regional benchmarks. Ryanair shares fell 2.9 percent, Air France shares lost 4 percent and IAG was down 2.5 percent. This came as major airlines cancelled flights from Brussels after the blasts.

"There will be a flight to quality in the dollar as we are seeing in the movement on dollar-euro," Bob Parker, senior adviser at Credit Suisse told CNBC Tuesday.

"It will also mean probably lower government bond yields across Europe when they are very low already."

Parker added that sharp movements to the downside in equity markets are typical following terrorist attacks and the effect usually only lasts for the short term. However, he added that the shock to consumer confidence may last longer.

"If security issues in Europe do escalate, as they look as though they are, there has to be a negative impact on consumer sentiment," he explained.

"The consumer sector actually started to improve over the last two to three months, so one bad news here is that we could see a negative impact on consumer psychology."

Stephen Jones, CIO of Kames Capital, also said consumer confidence could be affected. According to Jones, the flight to safe-haven assets, such as government bonds, was a predictable market reaction in the short term.

"The longer term outlook though is more problematic," he told CNBC Tuesday.

"You tend to get, obviously, a reduction in consumer confidence and perhaps a little more caution amongst investors as a result of such events."

The impact of terrorism on the travel and tourism sector can be significant. In the week following the November terror attacks in Paris, the number of flight cancellations to France rose 21 percent and the number of new bookings dropped by 27 percent compared to the previous year, according to data from analysts ForwardKeys.

The travel sector in Europe lost 1.3 percent on the first trading day following the Paris attacks on November 13, 2015. However, it bounced 2.5 percent the next day and finished the month of November higher by 1.4 percent.

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