Global stocks sink on fears of full-blown conflict between Russia, Ukraine
Global stock markets tumbled on Tuesday on concerns of a possible military conflict between Russia and Ukraine, after President Vladimir Putin announced that Moscow would “immediately” recognize the two republics in the breakaway Donbass region and send a military peacekeeping force to the area.
European shares hit a seven-month low, with Germany’s DAX and the CAC 40 in Paris sliding around 2%. The benchmark index of Britain’s leading companies, the FTSE 100, fell by 1.5% in early trading in London.
The plunge in Europe followed a shares nosedive in Asia overnight, with Tokyo’s Nikkei 225 index dropping 1.7% and the Hang Seng in Hong Kong sinking 2.8% in the biggest daily loss in five months.
During premarket trading in the US, the Dow Jones Industrial Average futures lost nearly 500 points, or 1.4%. S&P 500 futures slid 1.74%, and the Nasdaq futures were off by 2.6%. American stock markets were closed on Monday due to the President’s Day holiday.
In currency markets, the Japanese yen rose as much as 0.2% in Asia to a nearly three-week high of 114.50 per dollar, before paring its gains. The Swiss franc, another safe-haven, hit a one-month high overnight. The euro declined 0.1% to a one-week low of $1.1296, while the US dollar index stood at 96.083.
The prospect of economic sanctions against Russia has also spooked investors, with the pan-European STOXX 600 index plummeting 1.7% on Tuesday, entering its fourth straight session of losses. The benchmark has shed nearly 10% from its all-time high in early January.
“Financial market participants now wait for a response from the United States and Europe,” said analysts at Commonwealth Bank of Australia.
Washington and European capitals have already threatened tough sanctions against Moscow in response, with US President Joe Biden signing an executive order that prohibits Americans from investing, financing or trading in the Donetsk and Lugansk People’s Republics.
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