European stocks close weak as geopolitical tensions weigh
(RTTNews) – Despite a fairly sharp rebound in the final hour of trading, European equities ended on a weak note on Monday amid rising geopolitical tensions following Russia’s invasion of Ukraine.
In response to the invasion, the West continues to tighten sanctions against Russia, raising concerns about the impact on the global economy.
Western allies have announced the exclusion of key Russian banks from the Swift interbank system and frozen the assets of Russia’s central bank. Washington has banned US persons and companies from doing business with the Central Bank of Russia, the Russian National Wealth Fund and the Treasury Department.
The EU and UK have banned Russian planes from entering their airspace.
Russia’s central bank has more than doubled interest rates to 20% in a desperate bid to shore up the falling ruble and stem bank runs amid crippling Western sanctions over Russia’s war in Ukraine.
The ruble fell more than 40% to a record low against the dollar, while oil prices rose by as much as $7 a barrel as President Vladimir Putin put his country’s nuclear deterrent on high alert amid the ongoing conflict in Ukraine.
Meanwhile, Russian and Ukrainian officials are meeting at the Belarus-Ukrainian border to discuss a possible ceasefire, though optimism that the talks will result in a peace is slim.
The pan-European Stoxx 600 fell 0.09%. The UK FTSE 100 closed down 0.42%. Germany’s DAX slipped 0.73% and France’s CAC 40 slipped 1.39%, while the Swiss SMI was flat.
Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Iceland, Spain, Sweden and Turkey finished weak.
Denmark, Ireland, the Netherlands, Norway, Poland and Portugal closed higher.
In the UK market, Polymetal International fell more than 56% due to the company’s exposure to Russia.
Evraz fell 30%. Mondi closed down 12%. Coca-Cola fell nearly 11%. Standard Chartered, HSBC Holdings, Prudential, Smurfit Kappa Group, BP, IAG, Pearson and Barclasy Group lost 3% to 5%.
BAE Systems up more than 10% Germany said it would increase military spending in a major policy shift. Bunzl, Hikma Pharmaceuticals, Barratt Developments, Antofagasta, Taylor Wimpey, RightMove and B&M European Value Retail were up 4% to 8%.
Flutter Entertainment, Persimmon, Dechra Pharmaceuticals, Intertek Group and Halmo also made strong gains.
In the French market, Societe Generale collapsed almost 10%. BNP Paribas, Renault, Valeo, Faurecia, Credit Agricole, Saint Gobain and Danone lost 3% to 8%. Essilor, AXA, Accor and Air France-KLM also fell sharply.
Thales rose nearly 12%. Dassault Systèmes rose 4.3% and Atos rose 2.7%. Teleperformance rose 1.5%, while Legrand and Legrand both closed about 1.1% higher.
In the German market, Deutsche Bank, Volkswagen, Continental, Fresenius, Daimler, Bayer, Siemens, Munich RE and Allianz lost 2 to 5%.
Zalando grew by 6.5%. Siemens Healthineers, RWE, HelloFresh, MTU Aero Engines, Sartorius and E.ON grew by 2.5 to 4%. Qiagen and Vonovia also recorded strong growth.
In economic news, the Swiss economy grew more slowly in the fourth quarter as the restrictive measures related to the pandemic weighed on activity, the State Secretariat for Economic Affairs (SECO) announced on Monday.
Gross domestic product grew 0.3% sequentially in the fourth quarter, much slower than the 1.9% expansion in the third quarter. Growth should slow to 0.4%. On an annual basis, GDP growth slowed slightly to 3.7%, in line with expectations, from 3.8% in the previous quarter.
A key measure of turning points in the Swiss economy unexpectedly fell to its lowest level in a year in February, the results of a monthly survey by the KOF Institute showed on Monday.
The economic barometer fell to 105.0 from 107.2 in January, revised down from 107.8. Economists had expected the reading to rise to 108.5.
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