© Reuters. FILE PHOTO: Monitors displaying stock index prices and the Japanese yen exchange rate against the US dollar are seen after New Year’s celebrations at the Tokyo Stock Exchange (TSE) after the opening of trading in 2022 amid the coronavirus disease (COVI) goes.2/2
by Sinead Kairav
NEW YORK (Reuters) – Wall Street equities fell on Monday to their highest level since 2014 over supply concerns, a day after Russian President Vladimir Putin ordered troops into Ukraine’s Donetsk and Luhansk regions.
While investors braced for international reactions and volatility to Putin’s next move, the safe haven US dollar actually lost some ground and European stocks turned positive while the US Treasury remained open to diplomacy after the Kremlin. Yield was increasing.
European countries began declaring sanctions against Russia, with German Chancellor Olaf Scholz warning that the Nord Stream 2 gas pipeline would now be denied certification to begin operations and Britain would take action against Russian banks. US President Joe Biden was due to comment on the situation at 1300 (1800 GMT).
Europe’s index was essentially flat after falling below 2% earlier in the day and down 1.3% on Monday when US markets were closed for a holiday.
“The bottom line is that the fear factor remains high and until we get a clear picture of what Putin can or cannot do, the market will remain in a state of confusion,” said chief market economist Peter Cardillo. at Spartan Capital Securities in New York.
And rising oil prices added to the uncertainty as investors worried about the implications of Federal Reserve policy changes aimed at tackling high inflation.
“If oil prices keep rising and go above $100 and stay there for a sustained period, that means you will have even more inflation,” he said.
It was last at $97.03, up 1.72% on the day, after topping $99 for its highest level since September 2014, reflecting fears that Russia’s energy exports could be hampered by any conflict. US West Texas Intermediate (WTI) crude was up 2.04% to $92.93 a barrel, after hitting $96 earlier, its highest level since August 2014.[O/R]
It fell 270.99 points, or 0.8%, to 33,808.19, fell 23.46 points, or 0.54%, to 4,325.41 and fell 128.84 points, or 0.95%, to 13,419.23.
The MSCI World Equity Index, which tracks stocks in 50 countries, was down 0.6%, having previously fallen 0.8%, an index not seen since January 28.
MSCI’s broadest index of Asia Pacific shares outside Japan closed 1.4% lower.
After climbing to $1,913.89 last down 0.2%, it was the highest since June.
A strong rally in US Treasuries, driven by an initial bid in safe-haven assets after Russia ordered troops into isolated parts of eastern Ukraine, reversed as investors took a more cautious approach to assessing further developments.
The yield rose 2.1 basis points to 1.951%, at one point lowering the yield from 1.85% after the morning’s price jump. Yields move in the opposite direction to bond prices.
The euro rose 0.32% to $1.1346, down 0.212%. The Japanese yen weakened 0.20% versus the greenback at 114.96 per dollar, while sterling was trading at $1.3595 the previous day, down 0.02% on the day.
The Russian ruble fell to 80.9275 against the US dollar in early Asian trade, hitting its lowest level against the greenback since November 2020 before reversing. The dollar was down 0.7% against the ruble last time.