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Stocks rise after Ukraine panic, oil back below $100

Stocks rise after Ukraine panic, oil back below $100

A red London bus passes the stock exchange in London, Britain, February 9, 2011. REUTERS/Luke MacGregor/File Photo

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LONDON (Reuters) – European shares rose on Friday after a late Wall Street rally, as investors cheered coordinated Western sanctions on Russia that have targeted its banks but have not stopped it from a global payments system and left its energy sector largely untouched.

Oil prices fell back below $100 a barrel after rising on Thursday as concerns about supply disruptions eased.

However, the jump in European stocks was modest, and Wall Street looked set to open lower. Markets remained significantly lower than levels at the beginning of the week – MSCI World Index (.MIWD00000PUS.) It is 2.5% lower – after investors were stunned by Russian President Vladimir Putin’s decision to invade Ukraine.

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

By 1115 GMT, the Euro Stoxx index was up 1.78% (.stoxx) The FTSE 100 Index is up 2.1%. (.FTSE). German DAX (.GDAXI) It increased 1.3%.

Asian stocks closed higher, with the broadest MSCI Asia-Pacific stock index outside Japan (.MIAPJ0000PUS.) A rise of 0.78%. 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.

“Looking back, we see that markets tend to fade geopolitical risks quickly, but even then that appears to be fading very quickly,” said Salman Ahmed, global head of macroeconomics at Fidelity International.

Ahmed said the West’s decision not to remove Russia from the SWIFT interbank payments system was “a relief to the markets that the potential for black swan disruption is low”.

However, he said sentiment could change quickly given the enormity of the crisis unfolding in Eastern Europe.

“The difference this time around is that we have a major military power involved, and the risk of getting entangled in NATO is no longer a zero-probability event. So markets are struggling to price that risk. That recovery could change quickly if the situation on the ground changes.”

Russian stocks rose more than 10% (.IMOEX) But it came on the heels of one of the three biggest single-day stock market crashes in history.

The Russian stock market has deteriorated much more than during other crises

Low oil prices

Oil prices fell back below $100 a barrel as investor concerns about supply disruptions eased. Brent crude fell 0.38% to $98.7 a barrel, while US West Texas Intermediate crude fell 0.16% to $92.64, although both benchmarks were far from their highs.

Safe-haven gold, which jumped on Thursday, rose 0.26% to $1,908 an ounce but was below multi-month highs of $1,973.96.

Reflecting the relative calm in financial markets, yields on US 10-year Treasuries held steady at 1.954% after dropping to 1.84% on Thursday, the biggest daily drop since late November.

“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.

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, rose 0.1% to 97.2, after rising on Thursday to levels last seen during the first wave of the coronavirus pandemic.

The euro fell 0.2 percent to $1.117, but retreated from Thursday’s lows. The safe-haven Japanese yen and Swiss franc rose slightly but the gains were not like Thursday’s.

The Russian ruble rose slightly to 83.77 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.

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Additional reporting by Sujata Rao, Editing by Alison Williams, William McClain

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