Europe ends in the red after Russian invasion of Ukraine

EUROPE FINISHES IN THE RED

by Claude Chendjou

PARIS (Reuters) – European stocks ended sharply lower on Thursday and Wall Street was in the red mid-session after Russia’s military assault on Ukraine and as Westerners prepare to impose new sanctions in Moscow.

In Paris, the CAC 40 ended down 3.83% at 6,521.05 points, its biggest contraction since January 24. The British Footsie lost 3.88% and the German Dax 3.96%.

The EuroStoxx 50 index fell by 3.63%, the FTSEurofirst 300 by 3.18%. The Stoxx 600 fell 3.28%.

Widespread risk aversion is fueled by Russia’s land, air and sea offensive against Ukraine on Thursday in Europe’s biggest state-on-state attack since World War II. .

According to the Ukrainian police, fighting is taking place almost everywhere on Ukrainian territory, including at the site of the former Chernobyl nuclear power plant.

As Western countries prepare a new salvo of sanctions against Moscow, China has refused to talk about a Russian invasion and has said that it understands Russia’s “legitimate concerns”.

“While the invasion is not a complete surprise, the stock market still takes a sell-first, ask-questions-later approach,” says Ryan Detrick, strategist at LPL Financial.

The EuroStoxx 50 volatility index ended up 13.9% in Europe after rising to 40 points, its highest level since June 2020. Its American equivalent rose 8.6% to 33.8 points after touching 36.8 points, the highest since January 24.

VALUES IN EUROPE

On the European Stoxx 600, no compartment escaped the decline, but the sharpest falls affected banks (-8.1%), financial services (-3.7%), automotive (-5 .9%) and the transport and leisure compartment (-3.7%).

In Paris, Societe Generale and BNP Paribas fell by 12.1% and 7.4% respectively, while the European financial sector adopted several measures to protect itself from the Ukrainian crisis.

According to data from the Bank for International Settlements (BIS), European banks, especially those from France, Italy and Spain, have the most exposure in the world to Russia.

Shares of Lloyds, Allianz, Deutsche Bank, UniCredit and Austrian group Bank International fell 2.9% to 23.1%.

In the automobile sector, Renault, exposed to Russia via the manufacturer Avtovaz, which it controls, fell 9%.

Defense groups such as the French Thales, the British BAE Systems and the German Rheinmetall, on the other hand, gained from 3.3% to 5.1%.

AT WALL STREET

At the time of the close in Europe, the Dow Jones fell by 1.93%, the Standard & Poor’s 500 by 1% but the Nasdaq was practically stable.

All the sectoral compartments of the S&P evolved in the red, with the exception of high technologies (+0.1%).

The banking sector shows one of the largest declines (-4.3%) with Bank of America Corp, Citigroup, Wells Fargo and Goldman Sachs Group, which dropped 2% to 5%.

Results or forecasts from eBay (-1.7%), Alibaba (-4.4%), Booking (-9.8%) and Dish network (-5%) disappointed. Hertz Global, which posted record adjusted quarterly profit, took 9%.

OIL

Oil prices are soaring as the Russian offensive in Ukraine raises concerns about its impact on global energy supplies.

Brent, which crossed the $100 mark for the first time since 2014, climbed 6.9% to $103.55.

US light crude gained 5.04% to 96.68 dollars, after hitting 100.54 in session, a first since July 2014.

CHANGES

The dollar is up 1.3% against a basket of benchmark currencies after gaining as much as 1.501%, its biggest gain since March 2020, when the first wave of the COVID-19 pandemic began.

The euro, down 1.42%, fell to 1.11 dollars, the lowest since January 31.

The Russian ruble for its part fell 6.7% against the dollar to 86.92.

In cryptocurrencies, bitcoin fell 3.97% to $36,035.

RATE

Widespread risk aversion is causing strong demand for sovereign bonds, driving up their prices and lowering their yields.

That of ten-year US Treasury bonds fell 3.6 basis points to 1.9407% while its German equivalent of the same maturity contracted by 5.5 points to 0.171%. The yield of the French OAT lost 7.1 points to 0.662%.

METALS

On the London Metal Exchange, aluminum hit a record high of $3,443 a tonne before falling to $3,397 amid anticipation of Western sanctions that could affect supply chains from Russia, the metal’s main producer. .

Nickel, for its part, hit its highest level since May 2011 at 25,610 dollars per ton, while gold, the safe haven asset par excellence, gained up to 2.52% in session, evolving to its highest level since November. 2020.

THE INDICATORS OF THE DAY

The gross domestic product (GDP) of the United States in the fourth quarter which was revised slightly upwards to 7.0%, at an annualized rate.

Jobless claims, they fell more than expected last week to 232,000 in the United States.

(Report Claude Chendjou, edited by Marc Angrand)

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Europe ends in the red after Russian invasion of Ukraine