Markets Tumble As Ukraine Tensions Escalate

Markets Tumble As Ukraine Tensions Escalate
The crisis has had a huge knock-on effect on the markets, with Moscow's stock exchange plunging as much as 10%.

Russia's central bank has acted to shore up its currency as world stock markets fall over escalating tensions in Ukraine.

Investors are worried by the diplomatic stand-off between the West and Russia over President Vladimir Putin's decision to effectively occupy Ukraine's Crimea region following the change in leadership in Kiev.

The US threatened possible asset freezes and trade penalties as a response to Russia's military intervention.

The resulting flight from risk on the markets first saw stocks fall and gold rise in Asia, where the Nikkei in Japan lost 1.3%.

Russia's MICEX stock exchange later lost up to 10% of its value when it opened for business - later extending those losses to 12.5% by mid-afternoon - while Russia's central bank reacted to a plunge in the value of the ruble by raising its core interest rate to 7% from 5.5%.

he central bank did not mention Ukraine in its statement, but said the decision was aimed at preventing "risks to inflation and financial stability associated with the recently increased level of volatility in the financial markets".

The ruble, which was already down nearly 10% this year, had fallen below 50 to the euro for the first time.

It began trading below 36.4 to the dollar, also a record.

Dealers estimated Russia's central bank also sold up to $10bn of its gold and foreign exchange reserves, to help stem the ruble's fall.
Stacked gold bars Gold is among the commodities to rise alongside oil and wheat

Shares in Russian state-owned Gazprom were down more than 10% amid reports it will have to end discounted gas deals with Ukraine as tensions intensify over the debt-laden country's future.

European stock markets responded to the uncertainty in the region by falling more than 2% in some cases in early trading.

In London, the FTSE 100 lost 1.6% in the first few minutes of trading, with only two companies seeing any gains.

Germany's DAX was 3% lower in mid-afternoon as investors mulled close business links with Russia.

Oil major BP, which has a significant stake in Russia's biggest oil producer Rosneft, fell more than 1% on concerns of an escalation in tensions.

Separately, Rosneft shares slumped more than 8% in Russia.

Commodities were also volatile, with Brent Crude oil rising 2% and a combination of the crisis in Ukraine and poor weather combining to push wheat costs up almost 5%.

Gold was another asset to see gains as investors looked to move their money towards the traditional safe haven.

The market instability played out as efforts to help shore up Ukraine's finances gained momentum.

It was confirmed an International Monetary Fund (IMF) mission will start work in Kiev on Tuesday as the country seeks $35bn (£21bn) in financial assistance to avoid bankruptcy.

The uncertainty was felt across most markets because of the implications of a potential tit-for-tat trade battle - likely to be the first step of the international response to Russia's intervention.

While Russia's biggest export is the supply of oil and gas, it imports the vast majority of its goods and experts said the combination of higher interest rates and a weak ruble would push up inflation - making life tougher for Russian consumers.

Daniel McCormack, strategist with Macquarie, said of the reaction by investors: "Clearly the market is in a risk-off mode on the back of the geopolitical developments, the most concerning for Europe since the end of the cold war.

"All eyes will be on whether it spreads but I doubt that there will be a major sell-off as a result of this.

"It appears that the West is not going to intervene militarily, so this escalating into a full-blown war is very unlikely. The market is also supported by macroeconomic factors and central banks."

http://news.sky.com/story/1220031/markets-tumble-as-ukraine-tensions-escalate

It could be that the markets will have more impact on Putin than rhetoric and threats. If the people of Russia find they are the ones carrying the can for this in terms of their economy, they might stop backing Putin. Might, being the operative word.

just finished talking on phone about this with middle son at uni...........

I put to him that there are many ways of sinking a country...........................NATO, EU, G8 all have ways and means. This is very clever and behind the scenes diplomacy and for once we as the UK can stand proud to be at the head of....

Hague has been brilliant along with and is no less important than Merkel. This plan started last week in London.

Kerry from the US has also played a part OB has sadly not. If the Russian markets tumble, Putin will not be able to pay the federation monies to keep them on side. That equates to no army.......................They are there for Roubles not love of Putin

@Gerber
Except how long can Europe keep it up if Russia cuts the gas? maybe Criema and its warm water ports are worth it?

I'm no expert on Ukraine but one of the commentators here pointed out that the Ports of Stevastopol' (which Russia already rents of Ukraine and has constant military precense) could be worth some short term pain from Russian perspective.

gerber wrote:just finished talking on phone about this with middle son at uni...........

I put to him that there are many ways of sinking a country...........................NATO, EU, G8 all have ways and means.  This is very clever and behind the scenes diplomacy and for once we as the UK can stand proud to be at the head of....

Hague has been brilliant along with and  is no less important than Merkel.  This plan started last week in London.

Kerry from the US has also played a part OB has sadly not.   If the Russian markets tumble, Putin will not be able to pay the federation monies to keep them on side.  That equates to no army.......................They are there for Roubles not love of Putin

  

WHAT a load of one-eyed garbage...

Merkel has done little..
Britain has done nothing..
Europe will never use NATO against Russia..

Kerry speaks for the Obama Administration (not himself) ~ because that's his job, as SoS !
I think you need to brush up on your international diplomacy before writing such tripe, Gerber !    

Thanks Bee, I was trying to figure out who the "OB" was supposed to stand for. Oh yeah, Kerry's boss!  ::D:: 

Sassy wrote:
Markets Tumble As Ukraine Tensions Escalate

The crisis has had a huge knock-on effect on the markets, with Moscow's stock exchange plunging as much as 10%.

.................................................

  

OF COURSE the stock markets (and the commodity markets as well..) will "tumble" whenever anything like this happens !!!

THE major share markets (NY, London, Tokyo, Shanghai, Moscow..) are all in such a fragile and over-extended condition at the moment, that it hasn't taken much over the past 6 years to make them all jittery..

THEY jump at their own shadows these days !


EUROPE as a whole will be a lot worse off if anything does escalate over there !

Europe these days buys OVER half of its oil, gas, coal and uranium out of Russia or from Russian companies..

Plus over 90% of their chromium, cadmium and platinum for metallurgy comes from Russian mines !

Ben_Reilly wrote:
Thanks Bee, I was trying to figure out who the "OB" was supposed to stand for. Oh yeah, Kerry's boss!  ::D::

 

  

HOW many times to we see it when people try to take their partisan "cheap shots" at the opposition national leaders like this !

FORGETTING in their haste that the US Secretary of State, like the Foreign Affairs Ministers in most other countries, just happens to be the official spokesman in most such matters..

AND usually those critics only end up displaying their one political ignorance in the process...   

Beekeeper wrote:

Ben_Reilly wrote:
Thanks Bee, I was trying to figure out who the "OB" was supposed to stand for. Oh yeah, Kerry's boss!  ::D::

 

  

HOW many times to we see it when people try to take their partisan "cheap shots" at the opposition national leaders like this !

FORGETTING in their haste that the US Secretary of State, like the Foreign Affairs Ministers in most other countries, just happens to be the official spokesman in most such matters..

AND usually those critics only end up displaying their one political ignorance in the process...     

We should pity those who wish to contribute intelligently, but lack the prerequisites ...  ::D:: 

veya_victaous wrote:@Gerber
Except how long can Europe keep it up if Russia cuts the gas?  maybe Criema and its warm water ports are worth it?

I'm no expert on Ukraine but one of the commentators here pointed out that the Ports of Stevastopol' (which Russia already rents of Ukraine and has constant military precense) could be worth some short term pain from Russian perspective.

I was just about to reply to Gerber with the same remark.  Let's face it Putin holds a lot of strings, mainly the gas, and especially in the UK - he has a lot of financial holds here.  Things are pretty dire.  Also, don't the Russians own a lot of UK football clubs? That'd upset some more than the gas!

Breaking news: Largest Oil Refinery in Europe is on Fire. Coincidence?

http://englishrussia.com/2014/03/03/largest-oil-refinery-in-europe-is-on-fire/

 :-:cawg:-:  

ONCE again the "heavenly conman" has added his usual in-depth and thoughtful comments to the discussion !!!

Silly goose, he be..

 ::fishffight:: 

why does anyone care if Russia are kicking off in Ukraine and looking too take their old province back???

this whole "world  village" has gone way too far, and the west are showing themselves to be ever more irrelevant on the world stage with their sabre rattling and chest puffing  

as far as im concerned Putins a legend, hundred times better than muslim in chief obama

smelly_bandit wrote:why does anyone care if Russia are kicking off in Ukraine and looking too take their old province back???

this whole "world  village" has gone way too far, and the west are showing themselves to be ever more irrelevant on the world stage with their sabre rattling and chest puffing  

as far as im concerned Putins a legend, hundred times better than muslim in chief obama

[]

Odd one that, I mean why did we not just allow Germany to invade Poland to get their old complete Prussian province back and then let them keep it?