Russian stocks weaken sharply due to developments around Ukraine, the situation affects stock exchanges around the world - ČT24 - Czech Television

The main index of the Moscow Stock Exchange RTS lost over ten percent shortly after the start of trading, later erased part of the losses and shortly before 10:00 CET showed a decrease of about seven percent to 1122 points. The Russian ruble has fallen against the dollar to its lowest level in almost two years.

It is a response to the fact that Russian President Vladimir Putin he signed the decrees on Monday, which recognized the independence of the separatist “Donetsk People’s Republic” and “Luhansk People’s Republic” in eastern Ukraine’s Donbas. At the same time, he ordered the Russian army to launch a “peacekeeping mission” on their territory. Western countries condemn Moscow’s move and plan new sanctions against Russia.

The US dollar climbed to 80.97 RUB / USD against the ruble on Tuesday, the highest since March 2020. Shortly before 10:00 CET, it gained about 0.6 percent to 80.2 RUB / USD. Russia’s central bank said it was ready to take steps to ensure financial stability, but did not provide details.

The decline in the Russian ruble and stock prices was not prevented by a significant rise in oil prices, which is Russia’s main export item. “The direction of the market will be determined by the West’s decision on sanctions,” Russian investment bank Sinara said on Tuesday.

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Gold prices at a nine-month high

The European Union, in coordination with the United States and the United Kingdom, is preparing the largest set of sanctions to date to hit key sectors of the Russian economy.

The price of gold is close to the nine-month high at $ 1,910 (about 41,290 CZK) per troy ounce (oz; 31.1 grams) due to the sharpened situation in Ukraine. According to analysts, the price of metal, which investors buy more in times of uncertainty, could now approach the level of 1920 USD / oz.

The price of gold for immediate delivery reached over $ 1,913 in the morning, the highest since June 1 last year. “As the situation in Eastern Europe appears to be deteriorating day by day, there is very little reason to view gold negatively at the moment,” Reuters quoted OANDA analyst Jeffrey Halley as saying.

“Given the growing tensions between Russia and Ukraine, gold has risen in price by six percent over the past 14 days. By its nature, gold serves both as an insurance against inflation and serves primarily as a safe haven for financial savings in the face of increasing international political tensions, “said Roman Pilíšek, co-founder of Zlaté rezervy.

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Due to the fact that the situation in Ukraine is deteriorating every day, the price of gold will continue to rise, added Marek Brávník, an analyst at Golden Gate CZ. Growth is also supported by growing stagflationary pressures around the world, a situation that will be exacerbated by massive Western sanctions against Russia if Western politicians choose to do so. Stagflation means a more significant rise in prices when the economy stagnates.

Aluminum and nickel prices also climbed to multi-year highs due to fears of a deterioration in supply. “Aluminum and nickel continue to look good, given that any sanctions are likely to be targeted where it hurts the most – commodity exports,” Marex brokerage firm said.

“Aluminum prices are likely to move on a higher trajectory in the near to medium term, but things may calm down once (US President Joe) Biden and (Russian President Vladimir) Putin reach an agreement on Ukraine,” Reuters quoted CEO Kalkine Kunala as saying. Sawhney.

They also make other precious metals more expensive. The price of silver added 0.9 percent to $ 24.25 in the morning, the price of platinum rose by 0.7 percent and palladium by 0.5 percent.

Stocks in Europe

Shares in Europe are also weakening, due to developments in eastern Ukraine, they started trading by about 1.9 percent and are the lowest in seven months. They thus follow the development in Asia, where the main stock indices have also weakened significantly. Investors are concerned about the prospect of harsh sanctions against Russia and their effects on companies in other countries. Car manufacturers and banks are losing, shares in Germany are falling sharply.

The pan-European index STOXX Europe 600 later eased losses after an initial drop and was around 449.9 points shortly before 9:30 CET. Compared to the previous day, it depreciated approximately 1.1 percent and started the decline for the fourth day in a row. The indicator monitors developments on stock exchanges in 17 European countries, including, for example, Britain and Poland.

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Since the STOXX Europe 600 index hit a record in early January, it has written off around 10 percent. However, the overall decline was moderated on Tuesday by shares of oil companies, which are benefiting from strong growth in oil prices on world markets. The raw material is rising due to fears that tensions between Russia and the West could complicate the flow of supplies.

Shares in Germany, which is considered more vulnerable than other countries in Europe, are falling sharply. The main DAX index of the Frankfurt Stock Exchange depreciated about 2.2 percent after the start, before it eased losses to 1.6 percent and was around 14,495 points. Germany has strong trade ties with the Russian Federation, especially with regard to gas supplies. In addition, the DAX index lacks energy companies that would mitigate the overall decline of the index as in some other countries, such as Britain.

The London Stock Exchange’s FTSE 100 index lost 1.2 percent after launch, but later eased the loss to about half a percent and hovered around 7,448 points. The Paris Stock Exchange CAC 40 index reduced the initial loss to 0.8 percent and was close to 6733 points.

Some investors now prefer gold and government bonds instead of stocks, which they consider a safer place for their money in times of uncertainty. What will be important, according to analysts, will be how tough sanctions against Russia will be announced by the European Union and the United States.

Prague Stock Exchange

The Prague Stock Exchange fell by more than two percent on Tuesday after opening, but it has already erased some of the losses. The Czech currency is also weakening against the euro and the dollar. This follows from the information on the website of the Prague Stock Exchange and the data on the Patria Online server. The Prague stock market and the koruna seem to be reacting to a further increase in tensions in relations between Russia and Ukraine.

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The Prague Stock Exchange’s PX index fell 2.25 percent to 1402.41 points on Monday, the sharpest daily decline in 14 months. On Tuesday after the opening, the stock market depreciated another 2.3 percent, around 9:30 a.m. it reduced the loss to about 1.41 percent and the PX index was around 1,383 points.

The Czech currency, which investors classify as risky assets, is also losing ground and has traditionally weakened if the market is nervous. At around 9:30 am against Monday’s end, the koruna was weaker against the euro and the dollar by about a dime at CZK 24.46 / EUR and CZK 21.61 / USD.

Asian stocks

Asian stocks also weaken significantly on Tuesday. The main index of the Tokyo Stock Exchange Nikkei 225 fell by 1.71 percent and closed at 26,449.61 points. The main index of the Shanghai Composite Exchange around 8:30 CET lost about a percentage.

“The risks around Ukraine have taken a turn for the worse,” said analyst Makoto Kikuchi of Myojo Asset Management. “The tension was not expected to escalate too long as there was room for dialogue between the United States and Russia. However, if this space ceases to exist, the Nikkei index could fall below 26,000 points, “said Masahiro Yamaguchi of SMBC Trust Bank.

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Russian stocks weaken sharply due to developments around Ukraine, the situation affects stock exchanges around the world – ČT24 – Czech Television