Global markets plummet after Russia invades Ukraine

Britain’s biggest businesses took a £77billion hit today and world markets tanked as oil prices soared to levels not seen in eight years because of Russia’s invasion of Ukraine.

The FTSE 100 saw its biggest one-day fall since June 2020 as investors reacted to the full-scale invasion of Ukraine, dropping 3.9 per cent to 7,207.01.

Wall Street was 2.5 per cent down in early trading – and later in the morning session the Dow Jones had fallen 1.9 per cent to 32,491, the S&P 500 dropped 1.2 per cent to 4,175 and the Nasdaq lost 1.1 per cent to 12,895. 

The drop wiped £77billion off the value of the UK’s 100 biggest listed companies, meanwhile the price of Gold surged 2% and oil jumped over $100 a barrel – and is predicted to hit $130 by June – as investors seek safer bets amid the turmoil caused by war in Europe.  

And amid Putin’s stranglehold on the oil and gas market, prices spiked amid fears of shortages in 2022. Global wheat prices are also soaring – because so much of it comes from Ukraine, something experts predict could push up inflation and put further pressure on household finances.

Benchmark European gas prices jumped 50 per cent to €131 per megawatt-hour – the largest rise since at least 2005 – while the UK equivalent soared 54 per cent, amid fears of another major increase in energy bills for Britons. Brent crude flew past $100 and then $105 a barrel for the first time since September 2014.

The Dax in Germany and CAC 40 in France both fell by about 5 per cent this morning. The Dax settled down 3.9 per cent or 567 points at 14,064 this afternoon, and the CAC fell 3.8 per cent or 255 points to 6,526. 

Analysts said stock markets were ‘getting hit very hard’, while wholesale prices for heating oil and wheat jumped. Ukraine is a major food supplier and there are fears the rises could put further pressure on household finances.

The Moscow Stock Exchange – where trading was temporarily suspended today – fell by an astonishing 45.2 per cent or 1,395 points to 1,690 on the day at one point, while the rouble dived to a record low against the US dollar.

Russian forces fired missiles at several cities in Ukraine and landed troops on its south coast today after President Vladimir Putin authorised the ‘special military operation’ in response to what he said were threats from Ukraine.

Overnight, stocks in Asia fell with the Hang Seng in Hong Kong losing 3.1 per cent; the Kospi in Seoul falling 2.6 per cent; the Shanghai Composite Index down 0.9 per cent; and the Nikkei 225 in Tokyo dropping 2.2 per cent.

Already this week, fuel prices have reached new record levels as the Ukraine crisis affects the price of oil. The RAC said the average cost of a litre of petrol or diesel at UK forecourts on Tuesday was 149.30p or 152.68p respectively.

It warned drivers to expect petrol prices to hit the ‘grim milestone’ of 150p per litre in the coming days as retailers pass on rising wholesale costs amid concerns over the reliability of supplies after Russian troops entered Ukraine. 

And gas and food prices are now in danger of rising much higher than expected, with chair of the Foreign Affairs Committee Tom Tugendhat saying that the cost-of-living crisis will become ‘driven by war’. 

FTSE 100: The FTSE 100 index in London has plunged today on the news that Russia has attacked Ukraine, wiping £77bn of the value of its businesses 

SOUTH KOREA -- A currency trader at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul today

SOUTH KOREA — A currency trader at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul today

FTSE 100 – PAST TWO YEARS: The FTSE 100 plunged at the start of the pandemic but had recovered most of its losses since

SOUTH KOREA -- A currency trader at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul today

SOUTH KOREA — A currency trader at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul today

RUSSIAN MOEX INDEX -- The Moscow Stock Exchange fell an astonishing 45.2 per cent or 1,395 points to 1,690 today

RUSSIAN MOEX INDEX — The Moscow Stock Exchange fell an astonishing 45.2 per cent or 1,395 points to 1,690 today

PAKISTAN -- A stockbroker monitors the latest share prices during trading at the Pakistan Stock Exchange in Karachi today

PAKISTAN — A stockbroker monitors the latest share prices during trading at the Pakistan Stock Exchange in Karachi today

GERMANY -- Stock trader Arthur Brunner of ICF Bank AG looks at his monitor on the Frankfurt Stock Exchange floor today

GERMANY — Stock trader Arthur Brunner of ICF Bank AG looks at his monitor on the Frankfurt Stock Exchange floor today

The Conservative MP told BBC Radio 4’s Today programme: ‘The Russian people are still flying using planes with Rolls Royce and General Electric engines. The money still needs to be transferred and the cost of transferring that money still has an effect on the Russian Exchequer.

‘The decisions made around Europe are absolutely going to shape the way Vladimir Putin sees this because the reality is that if we leave this to stand, if we let this pass, you can forget about petrol at £1.70 a litre, which is where it’s heading now. It will be significantly higher.’

Russian central bank to intervene as ruble and Moscow exchange dive 

Russia’s central bank said today it would intervene as the ruble tumbled to a record low and the Moscow Stock Exchange reopened down 14 per cent after Moscow launched a military attack on Ukraine.

‘To stabilise the situation on the financial market, the Bank of Russia has decided to start interventions in the foreign exchange market,’ the bank said in a statement.

The measures are intended to provide ‘additional liquidity to the banking sector’ in Russia, with Western sanctions looming after the military operation announced by Russian President Vladimir Putin.

‘The Bank of Russia will ensure the maintenance of financial stability and continuity of the operation of financial institutions, using all necessary tools,’ it said. The central bank added that it and other financial institutions ‘have clear action plans for any scenario.’

The announcement came as the ruble-dominated Moex index opened down 13.97 per cent, according to the exchange’s website, while the dollar-dominated RTS was down 20.16 per cent. The exchange had announced a temporary suspension of trading earlier today.

The ruble fell by 9 per cent to 90 against the US dollar at 5.42am UK time, hitting an all-time low minutes after Mr Putin announced the military operation. It then bounced back slightly, but remained down 5.4 per cent from the previous day’s close as of 7.07am.

He added: ’10 per cent of the world’s wheat is grown in Ukraine and the idea that this year’s going to be a good crop, I’m afraid, is for the birds. This is absolutely one of those moments where we’re going to see the cost-of-living crisis driven by war.’

AJ Bell investment director Russ Mould said: ‘Not only will energy bills keep going up, but food prices look set to jump even higher. Ukraine and Russia are both big food suppliers and any disruption to supplies will force buyers to seek alternative sources, which could jack up prices.’

Russian-facing companies on the FTSE 100 took the brunt of the hits, with further sanctions looming. Shares in mining firms Evraz and Polymetal International fell by between a quarter and a third.

Only three of the 100 companies saw shares in positive territory during early trading.

Spooked by the movements, Polymetal said: ‘Polymetal believes that targeted sanctions on the company remain unlikely. Contingency planning has been initiated proactively to ensure business continuity.’

As Australian shares shed more than 3 per cent today, market analyst Chris Weston of Pepperstone in Melbourne said: ‘We now have a long night ahead of us trying to understand how bad this gets, and what sanctions get put up, because there has to be a fresh round of sanctions now against Putin and the Russian government.

‘That’s where the worst case, or the bear case scenario is for markets, and that’s what we’re seeing. There are no buyers here for risk, and there are a lot of sellers out there, so this market is getting hit very hard.’

Markets have been hammered this week after the Kremlin recognised two breakaway regions in eastern Ukraine and said it would provide ‘peacekeepers’ to the regions, leading to warnings of a conflagration.

Rob Carnell, head of Asia Pacific research at ING in Singapore, added: ‘Markets are now more adequately pricing in the risk of something horrific happening. That combined with the uncertainty is a horrible environment to be in.’

And market analyst Jeffrey Halley of Oanda in Indonesia said: ‘It is hard to find any reasons for the selloff to reverse now that it appears the tanks are rolling. Stronger sanctions are to come on Russia and energy prices will inevitably head higher in the short term.’   

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul today

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul today

SPAIN --  A screen displays European stock market values at the opening of the trading day at Madrid's Stock Exchange today

SPAIN —  A screen displays European stock market values at the opening of the trading day at Madrid’s Stock Exchange today

OIL PRICE – PAST WEEK: The oil price surged to more than $100 a barrel then $105 today as Russia’s invasion of Ukraine began

OIL PRICE – PAST TWO YEARS: The oil price has surged since the start of the pandemic in early 2020 to $100 a barrel

OIL PRICE – PAST 14 YEARS: Brent crude was pushed past $100 (£74) a barrel today for the first time since September 2014

JAPAN -- A person looks at a stock market indicator board in Tokyo today as the Nikkei Stock Average lost 478.79 points

JAPAN — A person looks at a stock market indicator board in Tokyo today as the Nikkei Stock Average lost 478.79 points

INDIA -- People walk past screens broadcasting headlines and share prices today at the Bombay Stock Exchange in Mumbai

INDIA — People walk past screens broadcasting headlines and share prices today at the Bombay Stock Exchange in Mumbai

In Russia, trading was suspended on the Moscow Stock Exchange, and the rouble plummeted to a record low against the dollar. The US dollar gained more than 10 per cent against the Russian currency at one point.

Starting from around 3am UK time this morning, attacks were reported across Ukraine. 

The price of Brent crude oil had jumped by 5.6 per cent by a little after 7am UK time to $102.30 per barrel, hitting its highest point since 2014. 

Ukraine President Volodymyr Zelensky said this morning that he had spoken to the leaders of the US, Germany, the EU, Poland and the UK. He said he had ‘urged to stop Putin, war against (Ukraine) and the world immediately’.

Early in the morning the Moscow Stock Exchange said it had ‘suspended trading on all of its markets until further notice’. But it later restarted at 10am local time, 7am in the UK. 

In Britain, Prime Minister Boris Johnson said Mr Putin has ‘chosen a path of bloodshed and destruction’ with his attack on Ukraine and that the UK and its allies would respond ‘decisively’. 

It came as Ukraine’s president declared martial law, while Russia’s military said it had targeted Ukrainian air bases and other military assets and had not targeted populated areas.

A Downing Street spokesman said the Prime Minister will chair a Cobra committee meeting to discuss the response to the ‘horrific attacks’.

The attack has come to Ukraine on all fronts, with bombs and missiles striking targets across the country, ground forces rolling in from Belarus, Crimea, Donetsk and Luhansk, and paratroopers dropping on Kharkiv

An explosion lights up the night sky over Kiev in the early hours of today, as Russia launched an all-out attack on Ukraine

An explosion lights up the night sky over Kiev in the early hours of today, as Russia launched an all-out attack on Ukraine

Smoke rises over Chuhuiv military airfield in eastern Ukraine after a Russian airstrike aimed at taking out the air force

Smoke rises over Chuhuiv military airfield in eastern Ukraine after a Russian airstrike aimed at taking out the air force

A huge explosion is seen at Vinnytsia military base in Ukraine today as the country comes under all-out attack by Russia

A huge explosion is seen at Vinnytsia military base in Ukraine today as the country comes under all-out attack by Russia

Vladimir Putin is pictured this morning declaring war on Ukraine, in what he termed a 'special military operation'

Vladimir Putin is pictured this morning declaring war on Ukraine, in what he termed a ‘special military operation’

Mr Johnson said he had spoken with Ukrainian President Volodymyr Zelensky to discuss ‘next steps’. 

Now UK flights are told to avoid Ukraine airspace

Aircraft flying to or from UK airports are being ordered to avoid Ukraine airspace after the crisis in the country intensified.

Transport Secretary Grant Shapps said he made the decision ‘following the horrific events overnight’ as Russia launched a major military assault.

The Cabinet minister tweeted: ‘I’ve instructed @UK-CAA (the Civil Aviation Authority) to ensure airlines avoid Ukraine airspace to keep passengers and crew safe. We continue to stand with the people of Ukraine and work with our international partners to respond to this act of aggression.’

Wizz Air cancelled its flights from the Ukrainian cities of Kyiv and Lviv to Luton today.

On Tuesday, Foreign Secretary Liz Truss urged British nationals in Ukraine to ‘leave now via commercial routes while they are still available’.

He added: ‘President Putin has chosen a path of bloodshed and destruction by launching this unprovoked attack on Ukraine. The UK and our allies will respond decisively.’

The Downing Street spokesman said Mr Johnson had assured Mr Zelensky the West ‘would not stand by as President Putin waged his campaign against the Ukrainian people’.

‘The Prime Minister said he hoped Ukraine could resist and that Ukraine and its people were in the thoughts of everyone in the United Kingdom people during this dark time,’ the spokesman said.

Mr Putin announced the action during a televised address early this morning, saying the move was a response to threats from Ukraine.

He said Russia does not have a goal to occupy Ukraine, but the responsibility for bloodshed lies with the Ukrainian ‘regime’.

He also warned other countries that any attempt to interfere with the Russian action would lead to ‘consequences they have never seen’.

Mr Putin accused the US and its allies of ignoring Russia’s demand to prevent Ukraine from joining Nato and offer Moscow security guarantees.

He said the Russian military operation aims to ensure a ‘demilitarisation’ of Ukraine, adding that all Ukrainian servicemen who lay down arms will be able to safely leave the zone of combat.

Explosions could be heard in the Ukrainian capital of Kyiv shortly after Mr Putin’s address, while explosions were also reported in the cities of Odesa and Kharkiv.

Ukraine’s border guard agency said the Russian military attacked the country from neighbouring Belarus.

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