Financial centers do not like uncertainty… While global stock markets have been in the hot seat for a week due to the worsening tensions on the Ukrainian border, Putin’s decision to recognize the independence of two separatist regions of Eastern Ukraine encourages investors to flee risk by causing a general drop in prices.
The observation is general: shortly after the opening of the European markets, the Stoxx Europe 600 index lost 1.8% to 446.6 points. In Paris, the CAC 40 and the SBF 120 yielded 1.5% each. In Frankfurt, the DAX 40 fell 2.4% and the FTSE 100 in London fell 1.2%. In Moscow, the RTS index plunged 5.1%, after having already lost 13.2% on Monday. In Asia, the Tokyo Stock Exchange’s Nikkei index closed down 1.7% and the Shanghai Composite dropped 1%…
In the United States, where the financial markets were closed on Monday due to a public holiday (commemoration of the birth of George Washington), futures contracts on the main indices also presage an opening in sharp decline. However, on Friday, investors in the United States had largely anticipated this exceptional closure by separating from stocks, particularly in technology. Wall Street had ended in sharp decline.
Effect on cryptocurrencies
Obviously, even if at the opening it was not a “black Tuesday” which was feared by some, several stocks plunged due to their exposure to Russia. This is particularly the case for Renault (-4.95%) or Société Générale Société which dropped 2.72%. On the other hand, investors are looking more for safe havens such as sovereign bonds or in the field of energy such as Total (+0.86%).
This risk aversion also weighs on cryptocurrencies. Bitcoin, the most famous of them, continues to fall. After breaking below the key threshold of 40,000 on Sunday, its price fell below the bar of 37,000 dollars, 36,937, 59 dollars more precisely.
At the same time, and this is bad news for motorists and oil users, prices are on a strong upward trend. The likely economic sanctions against Moscow could threaten Russian energy exports. Around 9 a.m., Brent, which is a reference in Europe, gained 2.7% to 98 dollars a barrel. “If oil prices rise sharply above $100 a barrel, gasoline prices will rise in the United States and inflation will accelerate further, forcing the Federal Reserve to consider raising rates at a pace faster,” according to a DS Asset Management analyst. A situation that we will also find in Europe and which could jeopardize growth.