The impact of Europe's volcano flight shutdown moved beyond airlines Monday, rippling through food and energy producers and by delaying an IMF-EU meeting in Athens, hitting Greek assets.
Even outside the area covered by the ash cloud, tourism worries hit Turkish stocks and the lira while concerns over flower, fruit and vegetable exports were undermining the Kenyan shilling.
Analysts said the main driver of market weakness on Monday was the fallout from The Securities and Exchange Commission's civil fraud charges against Goldman Sachs Group Inc. Friday, which hurt sentiment towards European banking stocks and boosted wider risk aversion.
But the volcano was becoming a key secondary driver.
Predictably, airlines and travel firms were the largest losers, continuing their fall from Friday as a shutdown of European air travel entered a fifth day.
British Airways, Lufthansa, Iberia, Ryanair, Aer Lingus, Air France-KLM and Finnair were down 2.7 to 7.7 per cent.
Travel firm Thomas Cook was the largest loser on the FTSE 100, down 3.9 per cent.. Channel Tunnel operator Eurotunnel rose 2.7 per cent as travellers sought other routes.
The airline industry says it is losing some hundreds of millions of dollars a day, with many analysts assuming the costs will end up being borne by already overstretched governments.
"Talk of the need for government bailouts for airlines will surely just add to concerns over the state of public finances in Europe," said Royal Bank of Scotland analyst Tim Ash.
"Presumably economies in Europe dependent on tourism will be disproportionately hit, depending on how long this all pans out. Unfortunately ... the likes of Portugal, Greece and Spain look vulnerable, as does Dubai."
Lower demand for jet fuel helped push crude oil to a three-week low, with oil firms such as BP and Royal Dutch Shell down almost 1 per cent
Food producers Nestle, Parmalat and Damisca lost 1.4 to 2.8 per cent as they struggled to maintain supply lines without air cargo.
The most striking indirect victim of the volcano cloud was Greece, which saw the spread between its bonds and German debt rise sharply after the flight shutdown forced the postponement of an International Monetary Fund and European Union meeting..
The Turkish lira hit a 10-day low while stocks hit a 2 1/2 week low.
The Kenyan shilling slipped to its lowest against the dollar since March 25 largely on export worries, with an association of flower exporters warning they were losing up to $2-million (U.S.) a day .
"It is weaker, but it is still roughly within its recent range," said Standard Chartered chief African economist Razia Khan. "I think as everywhere markets are still taking the shutdown on a day by day basis. If it gets to a week and there is still no sign of things clearing, you could see a much wider sell-off."
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