April 24, 2024

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European stocks fall as pressure increases on Russia's financial system

European stocks fall as pressure increases on Russia’s financial system

European stocks fell, oil prices rose, the ruble fell, investors rushed to the dollar, and new sanctions against Russia escalated tensions in financial markets.

The regional stock index Stoxx 600 fell 1.6 percent, Germany’s Xetra Dax lost 1.8 percent, and Britain’s FTSE 100 lost 1.5 percent. These moves came after Russian President Vladimir Putin put his country’s nuclear forces on high alert and Western powers To impose sanctions The Russian Central Bank in response to the invasion of Ukraine.

A sub-index of European banks fell more than 7 percent as traders reacted to uncertainty about the potential global effects of Western allies shutting down some Russian lenders. For Swift Payments System.

Hong Kong’s Hang Seng Index fell 1.6 percent to its lowest level in nearly a year. Brent crude, the global benchmark for oil, rose 4.4 percent to $102.17 a barrel.

Global stocks rose on Friday in a move analysts attributed to sanctions imposed on Russia to move away from targeting the country’s energy exports. But after escalating financial sanctions against Russia over the weekend, fund managers moved to dump risk in their portfolios, ditching aggressive bets on the global economy and future central bank policy while loading up on low-risk, easily traded assets.

“Investors are reducing their active bets,” said Michael Metcalfe, head of macro strategy at State Street. “Now is the time to take stock and reduce positions and try to assess all the possible outcomes that could arise” from the geopolitical situation, he added.

The dollar index, which measures the currency against another six, rose 0.5 percent. The yield on the two-year US Treasury fell 0.09 percentage points to nearly 1.5 percent, reflecting a significant rise in the price of debt.

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Tatjana Grill Castro, co-head of public markets at credit investor firm Muzinich & Co. “It’s a journey to safety and money is king in these times.” Anticipate this by providing liquidity to meet potential redemptions.”

ruble By up to 29 percent to nearly 118 against the US dollar on Monday morning. Then the Russian Central Bank more than doubled interest rates to 20 percent and banned foreign sales of domestic securities in an attempt to stem the fallout from the sanctions.

Meanwhile, futures contracts tied to TTF, the wholesale price of natural gas in Europe, rose by more than a fifth to 112 euros per megawatt-hour.

The FTSE Emerging Markets Index also outperformed on Monday, falling just 0.3 percent, as investors retreated from popular trade On the basis of betting on developing economies that are still affected by high rates of the Corona virus.

“If investors have large positions away from their target index, those positions may feel very risky right now,” Metcalfe said. “One of the active bets that many have bet on is being underweight [emerging markets] Slightly perverted they have to buy back.”

Elsewhere, shares in BP fell 6.8 per cent after the British group said at the end of the week that it would do so stripping Nearly 20 percent of its stake is in the Russian state oil company Rosneft.

Futures markets indicated that the US S&P 500 stock index will fall 1.7 percent in early New York trade.