European shares fell sharply on Tuesday, with travel and leisure stocks leading the market lower after explosions in Brussels killed several people.

Explosions tore through the departure hall of Brussels airport, and a separate blast hit a metro station in the capital shortly afterwards, the Belgian public broadcaster RTBF said.

“Geopolitical risk, including acts of terrorism which directly affect trade or movement, remains a significant risk factor to monitor,” said Lorne Baring, managing director of B Capital Wealth Management in Geneva.

“In a period where there is suboptimal growth both in Europe and globally, combined with equity valuations that are no longer cheap, there exists an environment which is susceptible to shocks that can act as a trigger for falls in asset prices.”

The STOXX Europe 600 Travel and Leisure index fell 2.4 per cent, the top sectoral decliner, with shares in easyJet , Ryanair, Accor, TUI and IAG down by 3.1-4.2 per cent.

The pan-European FTSEurofirst 300 index was down 1.1 per cent at 1,324.35 points, while Belgium's benchmark share index fell nearly 1 per cent. Across Europe, Germany's DAX fell 1.2 per cent, while France's CAC dropped 1.3 per cent.

Investors remained focused on unfolding events in Brussels, although there were some positive data releases.

French private sector activity expanded in March at the fastest pace in five months as a stronger than expected rebound in services helped offset weakness in manufacturing, while growth in Germany's private sector was steady in March, also helped by a solid upturn in the services industry, separate surveys showed.

Bucking the trend, Partners Group shares rose 3.7 per cent after the global private markets investment management firm proposed an increased dividend and said its FY revenues increased by 8 per cent despite foreign exchange headwinds.

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