Dhe share prices on the European stock exchanges fell significantly on Monday due to the Ukraine crisis and the prospect of rising interest rates in America. Shares from the travel and tourism sector, technology stocks and the cryptocurrency Bitcoin flew out of the depots, while safe havens such as Bunds and gold were in demand.
The German standard value index Dax initially fell below 15,000 points and was 3.8 percent lower at 15,011 points at the end of trading, the European Euro Stoxx 50 was also significantly weaker. Both indices are heading for their biggest daily losses since the end of November, when the omicron variant of the corona virus unsettled the stock markets.
Wall Street also went down. The US stock exchanges continued on Monday with significant losses from the pitch-black previous week. High inflation, expectations of faster interest rate increases, the wave of omicron infections, a mixed reporting season so far and then the Ukraine conflict – there are currently a wide range of reasons for very nervous investors to withdraw.
Risk mix makes investors shy away
The Dow Jones Industrial, which had already lost 4.6 percent over the course of the previous week, fell 1.8 percent to 33,649 points after just over an hour of trading. In the meantime it was below 33,500 points, its lowest level in six months. The market-wide S&P 500 lost 2.40 percent to 4292.60 points. The tech-heavy Nasdaq 100 continued its slide at a particularly rapid pace, falling 2.73 percent to 14,043.69 points. It is also at its lowest level in half a year.
“The risk mix of geopolitical tensions, a rising oil price and the prospect of continued high inflation rates and higher interest rates means that investors are currently avoiding shares,” said analyst Jochen Stanzl from the online broker CMC Markets. The volatility indices V-Dax and V-Stoxx, which measure investors’ nervousness, rose by up to 21 percent.
Stockbrokers expected that the American Federal Reserve would raise interest rates on Wednesday for March, said investment strategist Jürgen Molnar from the brokerage house RoboMarkets. “The market is just puzzling over how high this rate hike will be and how many will follow it over the course of the year.” It is also unclear how quickly the Fed will reduce its securities holdings.
Exchange rate losses in Russia
Investors fled Russian equities fearing Western sanctions in response to tensions with neighboring Ukraine. Moscow’s leading index fell by more than eight percent – the biggest slide since the Corona-related stock market crash in March 2020. The Russian currency also came under pressure. In return, the dollar was quoted at 79.40 rubles, the highest it was more than a year ago.
Despite diplomatic efforts, tensions between Russia and the West continue to escalate. On Monday, Russia accused the government in Kiev of provoking a military conflict. The danger of war has never been so great, said Kremlin spokesman Dmitry Peskov in Moscow.
The cryptocurrencies Bitcoin and Ethereum lost up to 15 percent of their value and were quoted at 34,329 and 2232 dollars at the level of half a year ago. The “anti-crisis currency” gold rose in price by 0.4 percent to $1,834 per troy ounce (31.1 grams). Bunds were also in demand, with yields on 10-year stocks falling to minus 0.102 percent.
The Siemens Energy share price initially collapsed by almost seven percent and marked a record low of EUR 17.805. At the close of trading it was EUR 18.04, a drop of around 5.7 percent. On Friday, the titles posted the largest daily loss in the company’s history at almost 17 percent due to ongoing problems at their wind power subsidiary Siemens Gamesa.
Investors responded to Philips’ numbers with sales. Shares in the medical technology company fell 4.6 percent in Amsterdam to a two-year low of EUR 28.04. Sales and operating profit in 2021 were below expectations, commented analyst James Vane-Tempest from the investment bank Jefferies.
Hoping for a breath of fresh air at Unilever, investors bought into the consumer goods manufacturer. The shares of the “Domestos” provider gained 7.3 percent in London and thus rose more than they have in a year and a half. According to insiders, activist financial investor Trian has bought into Unilever.
.
#Stock #market #prices #falling #sharply #Dax #falls #percent #investors #concerned #Ukraine #higher #interest #rates