Gas significantly more expensive again and stock market figures turn red due to escalation in Ukraine

After closing down 2 percent yesterday, European stocks reopened this morning with similar losses. At the Bel-20, the loss is limited to 0.9 percent for the time being. The EuroStoxx-50 is at 1.1 percent loss. Wall Street was closed on President’s Day yesterday. The forecasts there point to a loss of 1 to 2 percent at the opening of the markets.

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Stock analysts say the outcome of the conflict is difficult to predict now that Russian troops have crossed the border. Investors therefore choose to be safe. They are selling stocks and moving towards risk-free alternatives such as government bonds. The 10-year yield on German government bonds falls by 1.9 percent to 0.185 percent.

Moscow gets hit

Just like yesterday, the Russian stock market is also the biggest victim. After the Moex index in Moscow lost 10 percent yesterday, it is now again 5.1 percent lower. The Russian economy and companies are in danger of becoming a major victim if severe sanctions are imposed against Russia.

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The winners today are mainly the raw materials. In the first place, gas is again becoming significantly more expensive. The European gas price is again rising by 7.5 percent. There is a high risk that the gas supply to Europe will become even more difficult as a result of the conflict. Oil is also becoming much more expensive. With an increase of 5.8 percent to 99 dollars, it just barely breaks the 100 dollar barrier for a barrel of Brent oil. Russia is also one of the largest oil producers in the world. Finally, grain is also becoming more expensive again, as Russia is the largest grain exporter and Ukraine is the number five.

All of this, of course, increases the likelihood of an economic slowdown in Europe, combined with high inflation due to commodity prices. The word ‘stagflation’ (high inflation with low growth) will then come up quickly.

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