Wall Street and European stocks fell, oil prices rose, the ruble fell, and US government bonds rose after the new sanctions imposed on Russia that escalated tensions in the financial markets.
The US benchmark S&P 500 lost 0.7 percent, while the technology-focused Nasdaq Composite fell 0.1 percent.
In Europe, the regional Stoxx 600 index closed 0.1 percent lower. The Stoxx banking sub-index fell 5.7 percent as traders responded to uncertainty about Western allies shutting down some Russian lenders. For Swift Payments System. And German Xetra Dax shares lost 0.7 percent.
These moves came after Russian President Vladimir Putin put his country’s nuclear forces on high alert and Western powers To impose sanctions The Central Bank of Russia in response to the invasion of Ukraine.
Global stocks rose on Friday as traders reacted to punitive measures against Russia to turn away from the country’s energy exports. But after escalating financial sanctions against Russia over the weekend, fund managers dumped their portfolio risks, closing off aggressive bets on the global economy and future policy of the central bank while ramping up low-risk and easily tradable assets.
“Investors are reducing their active bets,” said Michael Metcalfe, head of macro strategy at State Street. “Now is the time to assess and reduce positions and try to assess all the possible consequences that could arise” from the geopolitical situation, he added.
Brent crude, the global benchmark, rose 2.9 percent to $101 a barrel. Futures contracts linked to TTF, the wholesale price of natural gas in Europe, rose 11 percent to €103 per megawatt-hour.
The yield on the two-year US Treasury fell 0.14 percentage point to 1.45 percent, reflecting a significant rise in the price of the highly liquid debt instrument. The benchmark 10-year Treasury bond rose as well, with the yield dropping 0.12 percentage points to 1.87 percent, despite expectations that the Federal Reserve will start raising interest rates from next month to fight rising inflation.
Tatjana Grill Castro, co-head of public markets at credit investor firm Muzinich & Co. “It’s a journey to safety.”
“It’s a rush for liquid assets and a bit of higher interest rate pricing, although the Fed will maintain some resolve,” she added.
Money markets earlier this month asked the Fed to raise interest rates to nearly 1.8 per cent by the end of the year. By Monday morning on Wall Street, those bets had fallen to just under 1.5 percent.
ruble By up to 29 percent To nearly 118 against the US dollar on Monday morning, later paring some of its losses. Russia’s central bank more than doubled interest rates to 20 percent on Monday and banned the sale of domestic securities to foreigners in a bid to stem the fallout from the sanctions.
Elsewhere, shares in BP fell 4 per cent after the British group said at the end of the week that it would do so stripping Nearly 20 percent of its stake is in the Russian state oil company Rosneft.
In Asia, the benchmark Hang Seng Index in Hong Kong fell 1.6 percent to its lowest level in almost a year before paring losses to close 0.2 percent lower.
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