Investors were already nervous about peaking share values before a series of explosions hit Madrid on Thursday morning sent their appetite for risk through the floor.
The reaction on stockmarkets around the world since then has in many cases eradicated gains made in the first two months of the year. For example, the Dow Jones Industrial Average index is now 3% below the level at which it started 2004, even though it has returned 34% over the past 12 months. However, stocks in the index of the largest US firms dropped by almost just as much on Wednesday as they did on Thursday, indicating the depth of unease about existing share price levels, even without including the risk premium associated with terrorism. The S&P 500 index is still up 37% over...
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