European stocks rallied on Friday after the Wall Street summit, as investors welcomed Western sanctions on Russia that targeted its banks but did not prevent it from withdrawing from the global financial system and relinquishing its power base. important.
Oil prices fell below $ 100 a barrel after rising on Thursday as concerns over supply disruptions eased. [O/R]
The jump in European shares was minimal, however, and Wall Street looked set to open low. Markets are down sharply from levels earlier this week – MSCI Global Index is 2.5% lower – after investors were shocked by Russian President Vladimir Putin’s decision to invade Ukraine.
On Friday, weapons hit the Ukrainian capital as Russian troops advanced on them.
At 1115 GMT, the Euro STOXX gained 1.78% higher while the FTSE 100 gained 2.1%. German DAX increased 1.3%.
Asian shares closed higher, with MSCI’s broad index of Asia-Pacific shares outside Japan up 0.78%. But in the Wall Street – where stocks launched a major overhaul after U.S. President Joe Biden unveiled sanctions on Thursday – futures point to a small opening in the US.
“Looking back, we see that markets are interested in eliminating geopolitical risks quickly, but even then this seems like a very rapid decline,” said Salman Ahmad, head of macro at Fidelity International.
Ahmad said the West’s decision not to lock Russia out of the SWIFT interbank payment system was “a relief to markets that the possibility of a real black swan disruption is small.”
However, he said sentiment could change rapidly given the magnitude of the crisis looming in Eastern Europe.
“The difference at the moment is that we have a significant military capability, and that the type of threat posed by NATO is not likely to be zero. So markets are trying to counter such threats. This return could change. as soon as the situation is on the ground of changes, ”he added.
Russian stocks grew more than 10% – but that followed one of the biggest stock market losses in history.
Oil prices fell below $ 100 a barrel as investor nervous about weak supply disruptions. Brent crude plunged 0.38% to $ 98.7 a barrel, while US West Texas Intermediate crude fell 0.16% to $ 92.64, although both stocks have fallen from their highs.
Secure Gold, which jumped on Thursday, was 0.26% higher to $ 1,908 an ounce but was below the multi-month high of $ 1,973.96.
Demonstrating relative stability in financial markets, the yield on US 10-year stocks remained at 1.954% after sliding to 1.84% on Thursday, the biggest daily decline since the end of November.
“The markets seem to reduce such risks. The additional sanctions announced against Russia are a matter for Russia, but the Russian economy is not very important to the global economy (and energy supplies are still flowing),” Paul Donovan, economist at UBS Global said. Wealth Management.
After some surprising moves in financial markets on Thursday, with more than 1% falling in most European currencies, foreign exchange rates are very quiet.
The US dollar index, which measures the greenback against the basket of major currencies, is up 0.1% at 97.2, rising on Thursday to levels seen last during the first wave of the coronavirus pandemic.
The euro dropped 0.2% to $ 1.117 but came off the lows Thursday. The Japanese currency and the Swiss franc, the two leading securities currencies, rose slightly but gains did not appear on Thursday.
The Russian ruble rose slightly to 83.77 against the dollar, rebounding from a low of 89.986.
With Russian troops advancing on the Ukrainian capital and more victims expected on both sides, many investors are bracing for further escalation of sanctions from the West.