The new sanctions imposed on Russia on Monday destabilized world markets which fear a surge in energy prices and strong economic consequences for European companies.
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European stock markets fell sharply around 11:55 GMT: Frankfurt lost 2.43%, Paris 3.09%, Milan 2.82%, and London 1.11%. The European benchmark Eurostoxx 50 index dropped 3.18%. The Moscow Stock Exchange was closed on its side, on the decision of the Russian Central Bank which fears to see the Russian titles collapse.
The New York Stock Exchange should also decline at the opening according to the futures contracts of the main indices, which lost 1.28% to 1.55%.
Commodities were on the rise again, starting with oil, whose US barrel of WTI rose by nearly 5%.
Russian and Ukrainian delegations began talks on Monday to try to end the war in Ukraine, on the fifth day of the invasion of Ukraine.
Westerners have taken heavy new financial sanctions against Moscow: in particular the decision to exclude many Russian banks from the Swift interbank platform, an essential cog in global finance.
This measure “does not block them, but it makes them chaotic and unreliable”, explains Ipek Ozkardeskaya, analyst at Swissquote bank, about Russian banks.
Michael Hewson, analyst at CMC Markets, points out that “fears that companies will not be able to pay for Russian oil and gas, which could well encourage Putin to cut off supply”, are driving prices up. oil and gas.
The Russian central bank’s access to capital markets has also been restricted, with the President of the European Commission wanting to “cripple” its assets. As a direct consequence, the ruble fell by more than 17% around 11:50 GMT.
Concretely “no G7 bank will be able to buy Russian rubles”, specifies Michael Hewson, who fears “a huge inflationary shock in Russia”.
The Russian central bank has announced that it will raise its key rate very sharply, by 10.5 points, to 20%, to deal with the severe economic sanctions.
The barrel of WTI oil jumped more than 4% to around 95 dollars and that of Brent by 4.67% to 102.5 dollars, after having exceeded the 100 mark for the first time since 2014 on Thursday.
On the European natural gas market, the benchmark contract soared 9% around 11:50 GMT.
Other raw materials also soared: soft wheat took 5.76%, palladium 5.54%. Russia and Ukraine are key countries for the supply of crucial raw materials.
Companies dependent on these supplies fell sharply: TotalEnergies fell by 5.63% and, in the mining sector, Polymetal lost 50.10%, Petropavlovsk 26.61% and Evraz 25.99%.
The oil company BP (-6.21%) withdrew from the Russian giant Rosneft (-40% in its listing in London), in which it held a 19.75% stake.
According to the European Union, around 70% of the Russian banking sector is currently excluded from the Swift system. The European Central Bank has noted the “bankruptcy or probable bankruptcy” of the European subsidiary of the Russian bank Sberbank, due to “significant” withdrawals. In London, where part of its capital is listed, Sberbank fell by 70%.
European banks suffered: Societe Generale lost 11.09%, BNP Paribas 8.86%, Commerzbank 7.54%, Deutsche Bank 8.89%, Unicredit 12.15% and the Austrian Raiffeisen 13.48%.
The European Union will supply arms to Ukraine and Germany has announced a marked increase in its military expenditure in the years to come.
In the wake of these announcements, defense companies were highly sought after. In Frankfurt Rheinmetall (tanks) soared by 27.84% and Hensoldt (radars) by 60.14%. In Paris, Thales took 12.04%, Dassault Aviation 8.76% and Leonardo gained 17.41% in Milan.
The euro fell sharply against the dollar, considered a safe haven in these times of uncertainty and traded at 1.1203 dollars (-0.58%). Investors also turned to government bonds to reduce their exposure to risk, the interest rate on US 10-year debt fell seven basis points to 1.91%.
Bitcoin rose 2.37% to $38,325.