European stock markets fell sharply at the opening on Thursday February 24, a few hours after Russia launched a military offensive in eastern Ukraine. At the opening, Paris fell by 4.19%, Frankfurt by 4.39% and London by 2.55%. The Euro Stoxx 50, the benchmark European index, lost 3.52% in a very high trading volume. Asian markets have also suffered the blow, from Hong Kong (− 3.24%) to Shanghai (− 1.70%) via Tokyo (− 1.81% at the close). In Moscow, the market plunged more than 30% as the ruble fell to a historic low against the dollar.
On the commodities side, oil broke through $100 (€90), a level it hadn’t seen since the start of 2014. And benchmark Dutch futures gained up to 41% in the Netherlands. -Low. All major analysts in the energy sector (Goldman Sachs, Wood Mackenzie, Rystad Energy…) expect very high prices during the year due to a shortage of resources for electricity production, industry and heating.
Metals will also burn. The price of aluminium, essential for the automotive and construction sectors, is approaching 3,400 dollars per tonne, a new all-time high. One of the world’s largest producers, Russia could curb or stop its exports in retaliation for severe sanctions from Westerners, who also risk being deprived of rare metals essential to the ecological transition. There is also concern about wheat, of which Russia and Ukraine are the world’s largest and fifth largest exporters: the price of the grain had risen 10% in two days, before the Russian intervention, to 16.71 dollars a bushel for delivery in May – something that hadn’t happened since September 2012.
Blow of tobacco for certain French companies
No company has escaped the massive sales on the CAC 40. But some French companies, very established in Russia, suffered a stronger blow. Present through its subsidiary AvtoVaz, Renault collapsed by 8.31% at the opening. Russia is its second market, with 482,000 vehicles sold in 2021, just after France (522,000). The company is in a delicate position: if the Renault-Nissan-Mitsubishi alliance has a majority stake in Avtovaz, Rostec, the agency managing the Russian state’s holdings, still holds 32%. And Russia is one of the few countries in which the manufacturer makes money (operating margin of 8.6% in 2021).
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