The Ukrainian crisis continues to be the main driver of the markets with investors closely following the news that is published on it. After a bearish opening, the Russian Ministry of Defense has just reported that it is withdrawing some troops from territories adjacent to Ukraine following completing military exercises. The markets are interpreting this movement as a sign of de-escalation. For other analysts it is early to know if it indicates a change.
In factin a last attempt to solve the conflict through diplomatic channels, the German chancellor, Scholz, is scheduled to travel to Moscow to meet with the Russian president, Putin, and thus avoid the armed conflict. “We will have to see if this meeting has any positive results, something that, at this point, we see as complicated since we believe that the Russian president is very clear regarding his intentions, whatever they may be, and this meeting is not going to change them,” he acknowledges. the experts at Link Securities.
The crisis in Ukraine is the main factor of nerves in the market
And it is that yesterday the Ukrainian crisis “came into play” with force, causing in Europe a massive flight of investors from their riskiest positions, which led to thehe main stock market indices in the region to close the day with sharp declines, although far from their lowest levels of the day. Neither sector was able to end the session on a positive note, although it was banks and insurers that suffered the most as investors sold off, taking advantage of recent gains in many of these stocks to make profits.
The causes were diverse but all had to do with Ukraine, with most Western countries recommending their citizens to leave the country and even closing their embassies and with some airlines, such as the Dutch KLM, announcing the cancellation of their flights to Kiev. All with the US administration leaking a possible Russian invasion of Ukraine before the end of the week but with an “interested leak” of the recommendation that the Russian Foreign Minister, Lavrov, would have given to the president of this country, Putin, that he not exhaust the diplomatic channel. The latter served as temporary relief for some investors, allowing the falls in European indices to moderate.
The truth is that so far Russia has always denied its intention to attack Ukraine, going so far as to describe the West’s attitude as “mass hysteria”. However, what Lavrov’s advice makes clear is that the military route is the main one that Putin currently handles, as long as his requests are not granted.
Although normally these conflicts tend to have a short-lived effect on the markets, the truth is that this conflict is different because of the consequences it may have on raw materials, which might continue to shoot upwards, weighing down the economic recovery in Europe, the main importer of the Russian crude. At this time, the oil futures Brent fell 0.92% to $95.59 while West Texas fell to $94.53.
On Wall Street, the Nasdaq managed to resist
On Wall Street, the Dow Jones ended the session with a penalty of -0.49%, to 34,566 points. The S&P500 closed at 4,401 points following falling just over three tenths while the Nasdaq 100 closed positive and, at a rate of +0.10%, closed at 14,268 points.
In the public debt market, the return on the ten-year US bond rose slightly, to 1.98%. The Bund offers a yield of 0.27% compared to 1.38% offered by the 10-year Spanish bond or 1.95% of Italian debt. The risk premium of these last two countries is trading at 111 and 168 basis points, respectively.
At the corporate level, yesterday we learned that the directors of Telecom Italia discussed on Monday the restructuring of Italy’s largest telecommunications group, while its newly appointed CEO prepares an alternative to the takeover bid by the US fund KKR.
What’s more, AMD closed the purchase of Xilinx in a record deal in the chip sector valued at regarding 50,000 million dollars.
Luton Rising, the public company that owns Luton airport, relaunches the long-term expansion of the facilities, managed by Aena
At a macro level, this Tuesday the Spanish CPI for January will be published. Earlier, the UK will release the unemployment rate for December. Germany will publish the ZEW index of investor confidence in Germany for February. Also at European level, the evolution of employment, GDP, the ZEW index and the trade balance will be known. In the US, the data to follow will be the producer price index for January.
At this time the Bitcoin rises more than 3.2%, to 43,691 dollars with a euro rising once morest the dollar, to 1.1314 units.
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