AFP, published on Friday, February 25, 2022 at 7:15 p.m.
World stock markets rose sharply on Friday, thanks to the absence of major economic sanctions imposed on Russia.
After losing around 4% on Thursday, European markets have erased much of their heavy losses the day before: Paris rebounded by 3.55%, London by 3.91%, Frankfurt by 3.67%, Milan by 3.59% and the European reference index the Eurostoxx 50 of 3.69%.
After losing more than 30% on Thursday, the Russian stock market rose more than 25%.
Wall Street, already in the green Thursday evening, continued its momentum: the Dow Jones gained 2.38%, the S&P 500 2.10%. The Nasdaq advanced 1.38% after jumping more than 3% the day before.
Ukrainian forces were fighting Russian soldiers in the capital Kiev on Friday, the second day of an invasion launched by Vladimir Putin who, defying Western sanctions, called on the Ukrainian army to take power.
Markets were mostly scared of possible economic sanctions against Russia on Thursday, but so far the country has not been kicked out of the Swift banking system and no other major sanctions have been issued.
“The decision to exclude energy from the sanctions list is in some ways understandable, given the global economic impact it could have,” said CMC Markets analyst Michael Hewson.
The markets also welcomed the beginnings of a possible discussion between Russia and Ukraine. Vladimir Putin would indeed be ready to send a delegation to Minsk, Belarus, for talks with Ukraine, according to Russian agencies, something systematically refused by the Kremlin so far.
“It seems very odd, given Putin’s comments this week, but that hasn’t stopped the markets from hoping there’s something in there,” the expert adds.
Shortly after, Vladimir Putin nevertheless called on the Ukrainian army to “take power” in Kiev and described the Ukrainian president and his entourage as “neo-Nazis” and “drug addicts”.
Bonds nevertheless rallied, with the US 10-year yield falling to 2%, a sign that investors were once again turning to riskier assets.
Moreover, faced with inflation which accelerated further in January in the United States, the markets’ assumption of being able to count on an accommodating Federal Reserve (Fed) and these times of war flew away.
“In reality the conflict in Ukraine should not change the pace of monetary policy tightening by the Fed,” said European equities manager at Axa IM, Gilles Guibout.
Commodities down
Oil prices were down sharply. The barrel of Brent moved away from the 100 dollar mark (-3.03% to 96.08 dollars), far from the peak of 105 dollars reached the day before, and the WTI fell by 2.42% to 90.56 dollars around 5:40 p.m. GMT.
Wheat (-8.45%) and European natural gas (-31%) fell from their peaks on Thursday.
Russia and Ukraine are essential countries for the supply of oil, gas, wheat and other crucial raw materials.
Mining, banks and airlines rebound
Weighed down on Thursday, mining resumed colors: Evraz, which announced an annual profit more than tripled in 2021 soared by 19.53%, Polymetal by 17% in London and ArcelorMittal took 10.05% in Paris.
In Frankfurt, Deutsche Bank took over 5.49% and Commerzbank 8.82%. In Paris, BNP Paribas jumped 3.01%, Societe Generale 4.23%, and in Milan Unicredit regained 3.81%.
On the air side, Fraport advanced by 5.19% Lufthansa by 6.49% MTU Aero Engines by 7.73%, Air France by 7.55%, Airbus by 6.43% and IAG, parent company of British Airways and Iberia, by 4.83%.
On the currency side
The euro rose 0.44% against the dollar to $1.1241, after hitting its lowest since June 2020 the day before.
The ruble fell another 2% more and was well above $80 at $82.3510.
Bitcoin rose 1.95% to $39,170.