Global markets rebound, reassured by limited sanctions against Russia

Global stock markets rose strongly on Friday, investors judging the sanctions against Russia to be limited and positively seeing Vladimir Putin’s openness to negotiations.

After losing around 4% on Thursday, European markets have erased much of their heavy losses the day before: Paris rebounded by 3.55%, London by 3.91%, Frankfurt by 3.67%, Milan by 3.59% and the European reference index the Eurostoxx 50 of 3.69%.

After losing more than 30% on Thursday, the Russian stock market rose by more than 25%.

On Wall Steert, the Dow Jones rose 2.51%, the Nasdaq index, with strong technological coloring, took 1.64%, and the broader S&P 500 index, 2.24%.

Ukrainian forces were fighting Russian soldiers in the capital Kiev on Friday, the second day of an invasion launched by Vladimir Putin who, defying Western sanctions, called on the Ukrainian army to take power.

Markets were mostly scared of possible economic sanctions against Russia on Thursday, but so far the country has not been kicked out of the Swift banking system and no other major sanctions have been issued.

“The decision to exclude energy from the sanctions list is in some ways understandable, given the global economic impact it could have,” said CMC Markets analyst Michael Hewson.

The markets also welcomed the beginnings of a possible discussion between Russia and Ukraine. Vladimir Putin would indeed be ready to send a delegation to Minsk, Belarus, for talks with Ukraine, according to Russian agencies, something systematically refused by the Kremlin so far.

“It seems very odd, given Putin’s comments this week, but that hasn’t stopped the markets from hoping there’s something in there,” the expert adds.

Shortly after, Vladimir Putin nevertheless called on the Ukrainian army to “take power” in Kiev and described the Ukrainian president and his entourage as “neo-Nazis” and “drug addicts”.

In the United States, investors were also rather encouraged by some good US macroeconomic indicators, notably durable goods orders above expectations in January and an increase in household consumption also above forecasts.

“You can’t really predict what’s going to happen in Ukraine,” commented Tom Martin of Global Investments, “but you can see what’s happening in the (US) economy. And it’s still pretty good. ”

“It’s a nice rebound, but I still think that until there is real clarity on what Russia is going to do in Ukraine, we have to remain optimistic, but cautious,” concluded Peter Cardillo.

Commodities down

Oil prices have started to fall sharply.

The price of a barrel of Brent from the North Sea for delivery in April ended down 1.16% at 97.93 dollars. In New York, a barrel of West Texas Intermediate (WTI) for April delivery lost 1.31% to 91.59 dollars.

Wheat (-8.45%) and European natural gas (-31%) fell from their peaks on Thursday.

Russia and Ukraine are essential countries for the supply of oil, gas, wheat and other crucial raw materials.

Mining, banks and airlines rebound

Weighed down on Thursday, the mining companies resumed their colors: Evraz, which announced an annual profit more than tripled in 2021 soared by 19.53%, Polymetal by 17% in London and ArcelorMittal took 10.05% in Paris.

In Frankfurt, Deutsche Bank took over 5.49% and Commerzbank 8.82%. In Paris, BNP Paribas jumped 3.01%, Societe Generale 4.23%, and in Milan Unicredit regained 3.81%.

On the air side, Fraport advanced by 5.19% Lufthansa by 6.49% MTU Aero Engines by 7.73%, Air France by 7.55%, Airbus by 6.43% and IAG, parent company of British Airways and Iberia, by 4.83%.

On the currency side

The euro rose 0.71% against the dollar to $1.1272, after hitting its lowest since June 2020 the day before.

Bitcoin rose 1.35% to $39,025.