The crisis in Ukraine plunges European stock markets

Posted 14 Feb. 2022 at 10:11Updated Feb 14. 2022 at 10:21

European stock markets opened sharply in the red on Monday morning. In question, the possibility of an invasion of Ukraine by Russia after new warnings from the American authorities at the end of last week. These announcements exacerbated tensions in markets already weakened by the prospect of rapid monetary tightening by the Federal Reserve.

As a result, investors massively abandoned risky assets, including equities. The Paris Stock Exchange plunged nearly 3.3% shortly after the opening of the European markets, to 6,782 points, close to its lowest level of the year hit on January 24. At the time, already, the rise in interest rates and the rise in tensions around Ukraine had caused a wave of panic on the world markets.

Government bonds sought

Elsewhere in Europe, the German DAX fell around 3.4% and the UK FTSE nearly 2%. Futures, meanwhile, were pointing to another sharp bearish session on Wall Street after Friday night’s sharp drop. “The risks associated [à l’Ukraine] will likely continue to weigh on markets until signs of easing tensions are clearly visible,” Saxo Bank strategists warn.

This time, government bonds benefit from the nervousness of investors. The latter rushed to these safe havens: the yield on German 10-year Bunds fell by 10 basis points on Monday to return below 0.2%. The French 10-year yield lost more than 8 basis points to 0.67%.

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