The European stock markets opened strongly in the negative due to the threat of war, but made up for the loss in the afternoon. Oil and gas will again become significantly more expensive.
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After closing with a 2 percent loss yesterday, European markets opened again this morning with similar losses. The loss was made up in the afternoon. At the opening of Wall Street, the Bel20 is back at a loss of 0.3 percent. The Euro Stoxx50 is at 0.1 percent loss. Wall Street opened 0.7 percent lower but still had a session to catch up on. Yesterday, US stock markets were closed on President’s Day.
• Live blog | Follow the latest developments in the conflict between Russia and Ukraine here
Stock analysts say the outcome of the conflict is difficult to predict now that Russian troops have crossed the border. With the situation not escalating further during the day for the time being, investors seem to be adopting a mostly wait-and-see attitude, with markets stabilizing towards midday. Risk-free alternatives such as government bonds still performed well in the morning, but that too reversed towards the afternoon with a slight rise in interest rates.
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 2.2 percent lower. The Russian economy and companies are in danger of becoming a major victim if severe sanctions are imposed against Russia.
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 9.3 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 2 percent to $ 97.3, it just barely breaks the $100 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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