European stocks were on track for a second session of steep losses when Russian forces seized a Ukrainian nuclear plant Following another night of incessant bombing.
The Stoxx 600 stock index, which fell more than 2% on Thursday, fell another 2.4% on Friday morning. The European stock index is now down almost 13%, in local currency terms, per year. German Xetra Dax was down 3.3% and the London FTSE 100 was down 2.7%.
The attack on the Zaporizhia plant prompted U.S. President Joe Biden to push for an immediate ceasefire at the site of Europe’s largest nuclear facility in southeastern Ukraine. A fire was extinguished at the plant early Friday.
Jose Manuel Alvarez, Spain’s foreign minister, said NATO would “discuss” possible intervention in Ukraine, including a potential no-fly zone, at a meeting of allied foreign ministers on Friday, though still unlikely.
Investors have so far focused on the potential for further sanctions against Russia to disrupt supply chains, cause a continued rise in commodity prices, push the eurozone economy Stagflation And thwart the U.S. recovery from the corona crisis. Now, many are also struggling to price up what began to feel like a relentless escalation of adverse events.
“The market is having a very hard time processing the new information that is constantly coming out about the escalating conflict,” said Georgina Taylor, director of multi-asset funds at Invesco.
“There have been quite a few interpretations as to how, historically, market responses to geopolitical risk tend to be short-lived, but it increasingly feels like there is no real historical comparison to it,” she added. “Initially the effects on the cost bases of certain sectors and supply chains were the focus, but I do fear it goes further beyond that now.”
Brent crude jumped 3.4 percent to $ 114.23 on Friday, before narrowing its gains later. The international oil index reached its highest level since 2012 on Thursday.
S&P Barometer of Raw material prices On the way to the largest weekly increase in 50 years, reflecting the strategic importance of Russia and Ukraine as producers, especially for Europe. The annual rate of inflation in the eurozone is expected to reach 6 percent this month. Russian natural gas, oil and coal supply between one-fifth and one-quarter of Western Europe’s main energy supply, according to an analysis by the Gavekal research house.
The yield on the 10-year US Treasury bill fell by 0.05 percentage points to 1.79% on Friday as its price rose. Germany’s corresponding bond yield fell by 0.03 percentage points to minus 0.01%.
The dollar added 0.3%.
Futures markets suggest that the Wall Street S&P 500 and the high-tech Nasdaq 100 will both fall 0.5 percent in early New York trading.
As the impact of war and sanctions on Russia resonates through global markets, investors are also debating whether central banks in the US and Europe will make plans to raise lending costs from a record low of the epidemic era.
Before Russia invaded Ukraine, the US Federal Reserve was expected to raise interest rates for more than seven years. Derivatives markets are now pricing less than six increases in the quarter to December.
Farming data on Friday are expected to show that U.S. employers added 400,000 jobs in February and wages rose at an annual rate of 5.8 percent, increasing pressure on the Fed to prevent an inflationary spiral of wages and prices.
In the Asia-Pacific, the Hong Kong Hong Kong index closed down 2.5% and Tokyo’s Nikkei 225 lost 2.2%.
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European shares drop after fire breaks out at Ukraine nuclear plant Source link European shares drop after fire breaks out at Ukraine nuclear plant