Global stocks slip as Russia-Ukraine tension heightens
Hopes diplomacy might resolve the Ukraine crisis gave way on news of increased shelling in the country’s east and a tough stance from Russia
18 February 2022 - 19:37
byHerbert Lash
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Russian foreign minister Sergei Lavrov attends a meeting with Russian President Vladimir Putin in Moscow, Russia, February 14 2022. Picture: SPUTNIK//REUTERS
New York — Stocks slid in Europe and on Wall Street while safe-haven government debt prices rose after hopes diplomacy might resolve the Ukraine crisis gave way on news of increased shelling in the country’s east and a tough stance from Russia.
European shares erased earlier gains and the ruble slipped sharply from a session high after a separatist leader in eastern Ukraine announced the evacuation of his breakaway region’s residents to Russia, a shock turn in the crisis.
The dollar rebounded and the safe-haven Swiss franc rose as sentiment that had improved on news late on Thursday that US secretary of state Antony Blinken would meet Russian foreign minister Sergei Lavrov next week soured.
The dollar and Swiss franc, recipients of flight to safety during times of crisis, rose. The dollar index, a measure of the greenback to six major trading currencies, rose 0.185%, while the euro against the franc fell 0.13%.
The ruble, meanwhile, weakened 0.51% at 76.84/$.
Russian assets have been hammered by fears of a military conflict that would almost certainly trigger sweeping new Western sanctions against Moscow.
Germany’s foreign minister, Annalena Baerbock, said all options are on the table regarding sanctions on Russia if it attacks Ukraine, including the Nord Stream 2 pipeline intended to bring Russian gas to Germany.
As tension mounts, history shows investors overestimate the downside impact and underestimate the possibility of a very positive upside in a resolution, said Thomas Hayes, chairman and managing member of hedge fund Great Hill Capital.
“In the worst-case scenario that Russia does take Ukraine, hypothetically as they took Crimea, a lot of the bad news is priced in and it would be ‘sell the rumour, buy the news’,” he said.
In Europe, the pan-regional Stoxx 600 share index lost 0.63% and MSCI’s gauge of stocks across the globe shed 0.54%.
On Wall Street, the Dow Jones industrial average fell 0.22%, the S&P 500 lost 0.31% and the Nasdaq composite dropped 0.81%.
US Treasury and European government debt yields dropped as concerns of a possible Russian invasion of Ukraine dented risk appetite. The yield on 10-year Treasury notes fell 3 basis points to 1.944%, while benchmark German 10-year bond yields were set for their biggest weekly fall since November.
Gold retreated slightly from the key $1,900/oz level. Spot gold dropped 0.3% to $1,892.06.
Crude oil extended losses and was heading for a weekly fall as the prospect of increased Iranian oil exports eclipsed fears of potential supply disruption resulting from the Russia-Ukraine crisis.
US crude fell 0.65% to $91.16 per barrel and Brent was at $92.67, down 0.32% on the day.
Bitcoin fell below the $40,000 mark, last down 2.13% at $39,823.03.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Global stocks slip as Russia-Ukraine tension heightens
Hopes diplomacy might resolve the Ukraine crisis gave way on news of increased shelling in the country’s east and a tough stance from Russia
New York — Stocks slid in Europe and on Wall Street while safe-haven government debt prices rose after hopes diplomacy might resolve the Ukraine crisis gave way on news of increased shelling in the country’s east and a tough stance from Russia.
European shares erased earlier gains and the ruble slipped sharply from a session high after a separatist leader in eastern Ukraine announced the evacuation of his breakaway region’s residents to Russia, a shock turn in the crisis.
The dollar rebounded and the safe-haven Swiss franc rose as sentiment that had improved on news late on Thursday that US secretary of state Antony Blinken would meet Russian foreign minister Sergei Lavrov next week soured.
The dollar and Swiss franc, recipients of flight to safety during times of crisis, rose. The dollar index, a measure of the greenback to six major trading currencies, rose 0.185%, while the euro against the franc fell 0.13%.
The ruble, meanwhile, weakened 0.51% at 76.84/$.
Russian assets have been hammered by fears of a military conflict that would almost certainly trigger sweeping new Western sanctions against Moscow.
Germany’s foreign minister, Annalena Baerbock, said all options are on the table regarding sanctions on Russia if it attacks Ukraine, including the Nord Stream 2 pipeline intended to bring Russian gas to Germany.
As tension mounts, history shows investors overestimate the downside impact and underestimate the possibility of a very positive upside in a resolution, said Thomas Hayes, chairman and managing member of hedge fund Great Hill Capital.
“In the worst-case scenario that Russia does take Ukraine, hypothetically as they took Crimea, a lot of the bad news is priced in and it would be ‘sell the rumour, buy the news’,” he said.
In Europe, the pan-regional Stoxx 600 share index lost 0.63% and MSCI’s gauge of stocks across the globe shed 0.54%.
On Wall Street, the Dow Jones industrial average fell 0.22%, the S&P 500 lost 0.31% and the Nasdaq composite dropped 0.81%.
US Treasury and European government debt yields dropped as concerns of a possible Russian invasion of Ukraine dented risk appetite. The yield on 10-year Treasury notes fell 3 basis points to 1.944%, while benchmark German 10-year bond yields were set for their biggest weekly fall since November.
Gold retreated slightly from the key $1,900/oz level. Spot gold dropped 0.3% to $1,892.06.
Crude oil extended losses and was heading for a weekly fall as the prospect of increased Iranian oil exports eclipsed fears of potential supply disruption resulting from the Russia-Ukraine crisis.
US crude fell 0.65% to $91.16 per barrel and Brent was at $92.67, down 0.32% on the day.
Bitcoin fell below the $40,000 mark, last down 2.13% at $39,823.03.
Reuters
Gold retreats from high as potential Russia-US meeting cools nerves
Rand firms and JSE edges up as investors eye Russia-Ukraine tension
Asian markets ease amid some hope on Ukraine crisis
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