The war in Ukraine sinks the European stock exchanges, 400 billion of capitalization burned

AGI – The trend of conflict in Ukraine has frightened the European financial markets which close in deep red. Russian military forces hit the Zaporizhzhia nuclear power plant, the largest in Europe, arousing condemnation from all over the West, which is preparing new sanctions. US Secretary of State Antony Blinken said that “unfortunately, tragically and horribly, this may not end anytime soon”.

Thus, as the Russian tanks approached Kiev, European stock exchanges sink and burned about 400 billion in capitalization in the session.

In Frankfurt the Dax lost 4.41%, in London the Ftse 100 index 3.59%, in Paris the Cac 4.97%. Worst of all is Milan where the Ftse Mib collapses by 6.24%, to the lowest since February 2021smashing over 35 billion in capitalization.

Since the beginning of the conflict between Kiev and Moscow, Piazza Affari has lost 13%, since the beginning of the year 20%.

Heavy losses in the banking sector: Unicredit -14.6%, Intesa Sanpaolo -9.1%, Banco Bpm 8.68%, B for 10.58%, Mediobanca 8.40%.

Wall Street is also in the red, but registering more contained drops: at the moment the Dow Jones is losing 0.93%, the S&P 1.17% and the Nasdaq 1.74%.

The escalating conflict overshadowed US labor market data, which showed an acceleration in employment growth last month, with the unemployment rate dropping to 3.8%, the lowest since February 2020.

Financial stocks, such as Bank of America, are also losing ground in US markets following the decline in Treasury yields, while energy stocks strengthen as crude oil prices rose in the wake of sanctions against Russia, a major oil producers. At the moment the WTI earns 2.98% and the Brent 2.77%. The price of gas continues to grow, now reaching 204 euros per MWh, equal to + 26.9%.

On the monetary source, the euro slips against the dollar, at its lowest since May 2020, showing a loss of almost 1.5%.

The war risks having dramatic effects on European growth and plunging the Eurozone into stagflation, with a stagnant or declining economic trend and inflation running due to rising commodity prices. The dollar, on the other hand, was strengthened by the US employment data which brings the prospect of a rate hike by the Fed even closer, in the face of an ECB that could instead find itself with its hands tied. Finally, the ruble remains very weak, albeit rising from the historical lows reached in recent days.

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