The headquarters of Russian oil producer Rosneft in Moscow on April 18, 2021 (AFP/Kirill KUDRYAVTSEV)
The markets displayed their vulnerability on Monday in the face of the war in Ukraine, still unable to anticipate the evolution and economic impact of the conflict 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 New York, Wall Street ended in severe decline, worried regarding the impact on the economy and inflation of the war in Ukraine and sanctions: the Dow Jones index lost 2.37%, the Nasdaq plunged 3.62% and the S&P 500 lost 2.95%.
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 third session of Russian-Ukrainian negotiations begins 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, and supplying the continent cannot otherwise be insured at this stage.
On the US market, fears of an embargo on Russian crude imports which would further increase oil prices, accelerated the losses at the end of the session.
US President Joe Biden “has not made a decision at this stage” on such an embargo, however, the White House said.
Soaring raw materials
Under these conditions, oil prices continued to soar on Monday.
The barrel of Brent from the North Sea, which had come close to 140 dollars at the start of the Asian session, then fell back but still ended up 4.31%, at 123.21 dollars.
Evolution of natural gas prices in Europe on the Dutch TTF market, in euros per megawatt hour (AFP / )
As for the barrel of West Texas Intermediate (WTI), for delivery in April, it rose 3.21%, to close at 119.40 dollars, following crossing 130 dollars at the start of the session.
The price of the benchmark European gas contract rose by 11.66%, following hitting a new record at 345 euros per megawatt hour.
The prices of metals continued to rise: that of aluminum exceeded for the first time the bar of 4,000 dollars per ton. That of nickel reached, like copper and palladium, a historic high of 55,000 dollars per ton.
Milling wheat reached 435 euros per tonne on the European market.
In this context, investors fear that inflation, already a concern, will rise further due to soaring energy and commodity prices, and that companies will suffer from these price increases which increase their costs. operating.
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 might however postpone it.
Evolution of the price of an ounce of gold from January 1, 2020 to March 7, 2022 in dollars (AFP / )
After exceeding $2,000 per ounce, a first since August 2020, gold traded at $1,996.81 per ounce shortly before 10:00 p.m. GMT.
The dollar gained 0.67% once morest the euro. Earlier, the European currency temporarily fell 1% once morest the greenback.
The Russian currency melted 16% to 139.29 rubles to the dollar, following hitting 177.26 rubles to the dollar, a new all-time low.
Many sectors in decline
“All companies with exposure to Russia — even a simple economic contact case — are sold as if they had suddenly contracted plague and cholera…”, summarizes Fidelity International in a note.
The Commerzbank logo in Frankfurt in February 2021 (AFP/Armando BABANI)
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 New York, the prospect of a jump in the cost of kerosene caused Delta Airlines (-12.78% to 30.11 dollars) and United Airlines (-15% to 31.20 dollars) to drop sharply.
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.
