Stocks see temporary rebound after coordinated sanctions on Russia

LONDON (Reuters) – European shares rose on Friday after a surprise rally on Wall Street of late, as investors welcomed coordinated Western sanctions against Russia that have targeted its banks but left its energy sector largely unchanged.

Oil prices fell sharply initially but returned to above $100 a barrel in early European trade.

Still, the jump in stocks was modest, and markets remained significantly lower than levels at the start of the week after investors were stunned by Russian President Vladimir Putin’s decision to invade Ukraine.

Rockets bombed the Ukrainian capital on Friday as Russian forces pressed their advance. Read more

By 0930 GMT, the Euro Stoxx was up 0.72% (.stoxx) While the FTSE 100 rose 1.1%. (.FTSE). German DAX (.GDAXI) Pay 0.05% higher.

Asian stocks closed higher. But on Wall Street – where stocks posted a massive rebound after US President Joe Biden unveiled sanctions on Thursday – futures pointed to a lower open in the US.

“Markets seem to be trimming the tail risks,” said Paul Donovan, chief economist at UBS Global. “The additional sanctions announced against Russia matter to Russia, but Russia’s domestic economy doesn’t matter as much to the global economy (and energy supplies are still flowing).” Wealth management.

In Asia, MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) Closed up 0.78%, the Shanghai Composite Index (.SSEC) Japan’s Nikkei rose 0.63% (.N225) Gained 1.95%.

Russian stocks rose 14% (.IMOEX) But it came on the heels of one of the three biggest single-day stock market crashes in history.

oil price

Oil prices started to rise again on concerns about supply disruptions, with Brent crude up 1.1% to $100.2 a barrel, while US West Texas Intermediate crude rose 0.46% to $93.29, although both benchmarks were far from higher. their levels.

Safe haven gold, which jumped on Thursday, rose 0.35% to $1,909 an ounce after retreating from a multi-month high of $1,973.96.

Reflecting the relative calm in financial markets, yields on US 10-year Treasuries were at 1.944% after an initial drop to 1.84% on Thursday, the biggest daily drop since late November.

After some dramatic moves in the currency markets on Thursday, including a drop of more than 1% in most European currencies, foreign exchange rates were much calmer.

The US dollar index, which measures the greenback against a basket of major currencies, was little changed at 97.185, after rising on Thursday to levels last seen during the first wave of the coronavirus pandemic.

The Russian ruble rose to 85.52 against the dollar, up from a record low of 89.986.

With Russian forces pressing on the Ukrainian capital and more casualties expected on both sides, many investors are preparing for a further escalation of sanctions from the West.

While US sanctions have been limited so far, with Russia’s actions escalating, there will inevitably be a sharper Western response in the coming days. On the other hand, European sanctions were more severe, with Germany halting its approval of the agreement. Seema Shah, chief global strategist, Principal Global Investors, said the Nord Stream 2 pipeline.

“As difficult as it may be, during a rapidly evolving geopolitical struggle, investors are best suited to stay balanced, bearing in mind that fundamentals are ultimately the driver of long-term investment returns.”

Additional reporting by Kanupriya Kapoor in Singapore. Editing by Alison Williams

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