Paris (AFP) – Global financial markets tumbled today, Monday, on the impact of fears of a Russian invasion of Ukraine.
At the beginning of trading, around 09:00 GMT, European markets recorded strong declines, as losses reached 3.68% in Milan, 3.51% in Paris and 3.28% in Frankfurt, the lowest level since October, and 1.91% in London .
The decline was most severe in the Moscow Stock Exchange; The RTS index lost 4.29% of its value.
Before the opening of the European stock exchanges, the Asian markets started this declining trend, as losses in the Tokyo Stock Exchange amounted to 2.23%, while the decline was less severe in the Chinese financial markets; The Hong Kong Stock Exchange fell 1.41%, and Shanghai 0.98%.
geopolitical situation
And investors began to worry regarding the current geopolitical situation since Friday, with the issuance of the first US statements warning of an “imminent” Russian invasion of Ukraine. These warnings turned the situation on Wall Street from green to red before the end of the trading session, and the Dow Jones index closed down by a percentage 1.43% The Nasdaq fell 2.78%, while the broader Standard & Poor’s 500 Index fell 1.90%. On Sunday, Washington renewed its warnings that Russia might invade Ukraine “at any time”, and intense diplomatic efforts over the weekend between Western leaders and the Kremlin failed to lower the level of tension.
safe haven
“The market is mindful of prices as the risk of war,” said Yoshin Stanzel, an analyst at CMC Markets. He added, “Even if markets are still hopeful that a last-minute diplomatic breakthrough on Ukraine can be achieved, many investors are finding themselves forced to sell shares due to the heightened geopolitical risks.”
Unlike stocks, the fear of armed conflict is causing investors to turn to assets they consider safer, such as government bonds.
With this in mind, the German 10-year government bond yield, the benchmark in Europe, fell from 0.30% to 0.20% at the close of the trading session on Friday. On the other hand, oil prices jumped to their highest level in seven years.
“All eyes are on the price of oil, which in the short term might reach the $100 threshold, an increase that would further affect the rise in inflation,” said Vincent Pouille, an analyst at the brokerage firm IG France.
Tensions on the border between Ukraine and Russia are at their highest, as Moscow, which has mobilized 130,000 Russian soldiers on the Ukrainian border, is carrying out large-scale maneuvers with live ammunition.
It is expected that German Chancellor Olaf Scholz will continue his diplomatic efforts in Kiev to contain the escalation on the ground and reduce the risk of a Russian invasion of Ukraine.
Bank shares
And if the losses included all sectors of the capital markets, the shares of banks were the most affected. “BNP Paribas” 5.19% of its value, stable at 61.50 euros.
In Frankfurt, Deutsche Bank shares fell 5.71% to 13.58 euros, while Unicredit fell 5.72% to 14.80 euros.
Transportation and Aviation
In turn, the shares of car companies incurred heavy losses, as do the shares of the entire industrial sector, as these shares are strongly affected by any expected change in economic activity. BMW increased by 4.12% to 91.37 euros on the Frankfurt Stock Exchange.
In turn, airline shares were hit hard by the current fears, as Air France-KLM Group slumped 8.12 percent to 4.04 euros, while the share price of tourism giant TUI plunged 6.43% to 267.90 pence on the London Stock Exchange.
Oil, Euro and Bitcoin
Oil prices continued to rise today, following jumping more than 3% on Friday. At around 09:55 GMT, the price of a barrel of Brent crude for April delivery fell by only 0.22% to $ 94.23, while the price of West Texas Intermediate crude for March delivery remained stable at $ 93.08. For its part, the single European currency lost 0.34% of its value once morest the dollar. Its price was 1.1312 dollars per euro.
Bitcoin also fell; It lost 0.31% of its value and the unit price was $42,100.
