European stocks fall as pressure mounts on Russian financial system
European stocks fell, oil prices rose, the ruble tumbled, investors rushed to the dollar and new sanctions on Russia added to tensions in financial markets.
The regional Stoxx 600 stock index fell 1.6%, Germany’s Xetra Dax lost 1.8% and Britain’s FTSE 100 lost 1.5%. The moves came after Russian President Vladimir Putin put his country’s nuclear forces on high alert and Western powers Impose penalties The Russian Central Bank in response to the invasion of Ukraine.
A sub-index of European banks fell more than 7% as traders reacted to uncertainty over the potential global effects of the shutdown of some Russian lenders by Western allies. For Swift payment system.
Hong Kong’s Hang Seng index fell 1.6% to its lowest level in nearly a year. Brent crude, the global benchmark for oil, rose 4.4% 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 stepping up financial sanctions against Russia over the weekend, fund managers ditched risk in their portfolios, abandoning aggressive bets on the global economy and future central bank policy while charging low-risk and easily tradable 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 six others, rose 0.5%. The two-year US Treasury yield fell 0.09 percentage points to nearly 1.5%, reflecting a significant rise in the price of debt.
Tatjana Grill Castro, co-head of public markets at credit investment firm Muzinich & Co. “It’s a journey to safety and cash is king in these times.” Anticipate this by providing liquidity to meet potential redemptions.
ruble Up to 29% near 118 against the US dollar on Monday morning. Then the Russian Central Bank more than doubled interest rates to 20% and banned foreign sales of domestic securities in an effort to stem the fallout from the sanctions.
Meanwhile, futures 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% as investors retreated from popular trade Based on bets on developing economies that are still affected by high rates of Corona virus.
“If investors have large positions away from their target index, those positions can look very risky right now,” Metcalfe said. “One of the active bets that many have bet on is being underweight [emerging markets] Slightly perverted, they must redeem.
Elsewhere, BP shares fell 6.8% after the British group said at the weekend it would. stripping Nearly 20% of his stake is in the Russian state oil company Rosneft.
Futures markets have indicated that the US stock index S&P 500 will fall 1.7% at the start of trading in New York.
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