Europe stock markets: falls of more than 4% after the attack on Ukraine

Black day for the bags in particular and the world in general. The Russian President, Vladimir Putinhas announced in the early hours of this Thursday a “special military operation” in Ukraine, in Donbas, the region of the self-proclaimed “people’s republics” of Lugansk and Donetsk that Russia recognized as independent on Tuesday. Given this, Ukraine has denounced the “large-scale invasion”, but has added that it will defend itself and win”. According to Putin in a surprise televised speech, the goal is to “demilitarize” Ukraine and “any bloodshed” will fall on the conscience of this country, whose soldiers he has asked to immediately lay down their arms and return home.

The Ukrainian Border Service ensures that military of Belarus have helped Russia during the attacks that “suffered the Ukrainian state border” this morning. The attacks by Russian troops “with the help of Belarus” have taken place with artillery, heavy equipment and firearms, said that body in a statement on Facebook. “At approximately 05:00 local time in the morning, The state border of Ukraine in the area close to the Russian Federation and the Republic of Belarus was attacked by Russian troops with the support of Belarus,” the note said.

Meanwhile, the Russian Defense Minister assures that his country’s navy has destroyed anti-aircraft defense systems and put the military infrastructure of Ukraine’s air bases out of service. “The military infrastructure of the air bases of the Ukrainian forces has been put out of service,” the minister said, according to Russian news agencies cited by France Presse. For its part, the Ukrainian navy says in a statement that it has shot down five planes and a helicopter of the Russian army in the east of the country. “Five planes and a helicopter of the aggressor have been shot down,” says the statement collected by France Presse, after Putin launched a military operation against Ukraine in the Donbas region.

In addition, one of the worst scenarios is confirmed: Russia advances towards Kiev. “The market was always trying to judge whether (Russia) would stop at Donbas, and it seems pretty clear that they are moving towards Kiev, which was always one of the worst case scenarios, because now we have a long night ahead of us trying to understand until where does this come from, and what sanctions are imposed, because there needs to be a new round of sanctions now against Putin and the Russian government,” said Chris Weston, head of research at Pepperstone. “That’s where the worst case scenario is, or the bear case for the markets, and that’s what we’re seeing. There are no buyers for the risk, and there are a lot of sellers out there, so this market is taking a big hit.” “.

With this scenario, the European stocks cut sharply, while the dollar, gold and oil prices rise. The German DAX falls 4.70% to 13,943.34, the IBEX 35 falls 4.30% to 8,077 points, the London FTSE 100 falls 3.24% to 7,255.40, the CAC 40 subtracts 3.88% to 6,517.80, and the Italian stock market loses 4.41% to 24,810. For its part, the EURO STOXX 50 cut 4.84% to 3,781.15 points.

Experts explain that the conflict will worsen inflation. “Although it is true that history indicates that the stock markets usually recover strongly and present important advances a year after the start of armed conflicts, on this occasion we understand that the main problem is not so much the war that has started in Ukraine -undoubtedly it is and will be a humanitarian drama, like all wars-, but rather the impact that this conflict may end up having on the energy market and, therefore, on inflation”, they point out from Link Securities. This variable could end up seriously penalizing the economic recovery, leading the markets to have to face a scenario of low growth and high inflation. We understand that the central banks’ room for maneuver to deal with this scenario, if it comes to pass, is very limited, “and that is what really worries us,” they add.

Reactions to the invasion of Ukraine

The world must create “an anti-Putin coalition” to “force Russia to peace,” declared the Ukrainian President Volodymyr Zelenskywhose country has been under attack by Russia since Thursday morning. “We are building an anti-Putin coalitionZelensky said after talks with the leaders of the United States, the United Kingdom and Germany, among others. “The world must force Russia to peace,” he added.

Meanwhile, the EU leaders set to discuss new sanctions on Russia at emergency summit to be held on Thursday, the EU reported in a statement. “The President (of the European Commission), Ursula von der Leyen, will present a new package of sanctions that the European Commission is finalizing and that the Council will adopt quickly,” the statement said. These “new restrictive measures … will impose massive and severe consequences on Russia for her actions,” she added.

The French President Emmanuel Macron He has called for Russia to “immediately” suspend its military operations in Ukraine, calling it a “war”. “France strongly condemns Russia’s decision to wage war on Ukraine. Russia must immediately cease its military operations,” she said in a tweet. In addition, she stresses France’s solidarity with Ukraine and its citizens, and works with its partners and allies “so that this war ends.”

The German Chancellor Olaf Scholz He has condemned the Russian attack this morning against Ukraine, which he has described as a “flagrant breach of international law” that “cannot be justified under any circumstances”. “Germany condemns in the strongest terms this thoughtless act by President Putin,” he adds, referring to Russian leader Scholz, who also expresses his solidarity with “Ukraine and the people who live there.”

Spanish Foreign Minister José Manuel Albares, He has denounced in a tweet the “unjustifiable Russian attack on Ukraine”, which he considers a “flagrant violation of international law”. Albares condemns the “aggression” and asks for its cessation. Spain, according to him, is coordinating with its partners in the European Union and NATO allies to give a “response”. He expresses his “solidarity with the government and people of Ukraine.”

China states that “a peaceful solution is still possible” to the Ukrainian crisis. “China believes that the door for a peaceful resolution of the Ukrainian crisis has not yet been completely closed, and should not be closed. We welcome any efforts that can help resolve this through diplomatic channels,” the Chinese ambassador said. before the United Nations, Zhang Jun, at the last meeting of the Security Council, according to a statement collected by Efe.

other markets

The asian indices They also fall hard. The Nikkei subtracts 1.81% to 25,970.82 points, the Shanghai Composite loses 1.70% to 3,429.96 points and the SZSE Component falls 2.21% to 13,250.76 units. The Hong Kong Hang Seng lost 3.67% to 22,790.00 points and the Seoul Kospi fell 2.60% to 2,648.80 integers.

The Bank of Japan It has no immediate plans to scale back its massive stimulus program but will examine how rising import costs could affect the public’s perception of the inflation outlook, Gov. Haruhiko Kuroda said.

Yesterday wall street The session ended in negative, with the DOW JONES Ind Average losing 1.38% to 33,131.76 points, the S&P 500 subtracting 1.84% to 4,225.50 points and the NASDAQ 100 falling 2.60% up to 13,509.43 points. This Thursday, Wall Street futures also come with sharp falls of 2.19% for the Dow Jones, 2.22% for the S&P 500 and 2.94% for the Nasdaq.

For its part, oil rebounded strongly. The price of crude Brent soars above $102 this morning, 5% more than the day before and its highest value since July 2014, after Russia began its offensive on Ukraine. This rise, which responds to the beginning of the Russian attack, means that oil is in highs not seen since 2014when it traded above $106.

Gold futures rose strongly 1.72% to $1,943.20 per ounce.

The euro trades against the dollar with falls of 0.56% in the 1.1246 greenbacks.

For its part, Bitcoin plummets 7.28% to $35,228.4.

agenda of the day

Today the French consumer confidence for the month of February will be known. Italy is to publish industrial sales for December and the UK will release the CBI survey of the distribution sector for February.

In the US, the data to follow will be the national activity of the Chicago Fed for January and preliminary data for the fourth quarter: GDP and personal consumption spending. In addition, figures for home sales and crude oil inventories will be known.