Frankfurt closes down 1.98%, Paris 1.31%, Milan 1.36% and London 0.40%. In Zurich, the SMI lost 0.84%.
The markets were still very vulnerable on Monday, still unable to anticipate the evolution and economic impact of the conflict in Ukraine, which is causing a surge in commodity prices and high volatility.
After declines of more than 4% at the start of the day, some European indices made a small foray into the green before finally retreating to end in the red: Frankfurt dropped 1.98%, Paris 1.31%, Milan 1.36% and London 0.40%. In Zurich, the SMI lost 0.84%.
In New York, the indices widened their losses, worried regarding the impact on the economy and inflation of the war in Ukraine and the sanctions: the Dow Jones index lost 0.53%, the Nasdaq -2.14% and the S&P -2.18% around 6:10 p.m. GMT.
Stunned at the opening by discussions on the possibility of banning Russian oil imports in response to the invasion of Ukraine, European indices relaxed a little following the announcement of a meeting between the heads of Russian and Ukrainian diplomacy scheduled for Thursday in Turkey and before the start of the third session of Russian-Ukrainian negotiations Monday evening in Belarus, devoted to humanitarian corridors.
This ended Monday at the end of the day with some “positive results”, announced Mykhaïlo Podoliak, member of the Ukrainian delegation, on Twitter.
Investors also took note of German Chancellor Olaf Scholz’s statement that fossil fuel imports from Russia are “essential” for the “daily life of citizens” in Europe, saying supply to the continent cannot not be otherwise insured at this stage.
These last twelve days have been difficult for the financial markets which are facing uncertainty regarding the evolution of the conflict in Ukraine and its economic and financial impact.
Soaring raw materials
Fear of a Western embargo on Russian oil caused oil prices to soar once more on Monday: around 6:00 p.m. GMT, the barrel of American WTI oil climbed 2.53% to 118.65 dollars and the price of barrel of Brent from the North Sea soared 4.13% to 122.99 dollars following having come close to 140 dollars on Sunday.
The price of the benchmark European gas contract rose by 11.66%, following hitting a new record at 345 euros per megawatt hour.
Metal prices continued to rise: that of aluminum exceeded the bar of 4,000 dollars per ton for the first time. That of nickel reached, like copper and palladium, a historic high of 55,000 dollars per ton.
Milling wheat rose to 435 euros per tonne on the European market.
In this context, investors fear that inflation, already a concern, will rise further due to the soaring prices of energy and raw materials and that companies will suffer from these price increases which will increase their operating costs. exploitation.
However, according to several market observers, this crisis should not call into question the normalization of monetary policy by the European Central Bank, which meets on Thursday, but perhaps postpone it.
After exceeding $2,000 per ounce, a first since August 2020, gold traded at $1,981.50 per ounce (+0.55%) around 5:50 p.m. GMT. The dollar gained 0.47% once morest the euro. Earlier, the European currency temporarily fell 1% once morest the greenback.
The Russian currency was still melting by 12.59% following hitting a new historic low.
Many sectors in decline
“All companies that have exposure to Russia – even a simple economic contact case – are sold as if they had suddenly contracted the plague and cholera…”, summarizes Fidelity International in a note.
Banking-insurance was once more neglected, such as Allianz (-2.83% to 183.22 euros), Commerzbank (-5.19% to 5.64 euros, at MDax), Deutsche Bank (- 2.77% to 8.90 euros), Munich Re (-4.45% to 209.15 euros) in Frankfurt or Société Générale and BNP Paribas which have sunk by more than 4%.
In tourism, Air France-KLM tumbled 6.07% to 3.30 euros and the Accor hotel group lost 7.12% to 24.25 euros. In London, Easyjet plunged 7.53% to 439.50 pence and IAG nosedived (5.86% to 116.24 pence). In Dublin, Ryanair fell 7.79% to 12.25 euros.
In Frankfurt, Adidas finished behind (-5.40% to 176.90 euros). The group realizes less than 3% of its sales in Russia but has not yet communicated on the continuation or not of its activities in the country. Its rival Puma, which announced Saturday to suspend them, fell 3.99% to 64.98 euros.
