European stock markets tumbled deep into the red on Monday as oil prices rocketed amid concern about a possible Russian invasion of Ukraine.
In London, the FTSE 100 (^FTSE), which has a large exposure to energy and commodities stocks, fell 1.8% after opening, while the CAC (^FCHI) tumbled 3.4% in Paris, and the Frankfurt DAX (^GDAXI) was 3.5% lower.
Travel and leisure and the banking sector also dragged the indices lower.
Over the weekend, tensions between the two countries mounted further. The US warned Russia could launch an invasion of Ukraine within days, while UK prime minister Boris Johnson is set to travel to countries in Europe this week in a bid to unite Western allies.
Brent crude (BZ=F) was trading at as much as $96 (£71.14) per barrel on the back of the news, its highest since September 2014, as investors worried about disrupted supplies in an already-strained energy market. West Texas Intermediate was also at a new seven-year high.
This week will mark the ninth consecutive week of gains for oil prices, with analysts betting prices will reach $100 a barrel by the end of the week.
“Markets are preparing for the risk of war in Europe, and it’s adding to the complex issues driving uncertainty and volatility in global markets currently,” Kyle Rodda of IG said.
“US reports on Friday suggested an invasion by Russia into Ukraine could come as soon as this week — earlier than expected, because it was thought the Russians would avoid making such a move before the end of the Beijing Olympics to placate the Chinese — with further reports today suggesting Wednesday may be the planned day.”
Across the pond, S&P 500 futures (ES=F) were down 0.1%, Dow futures (YM=F) likewise shed 0.1%, and Nasdaq futures (NQ=F) were 0.3% lower as trade began in Europe.
It came after a sell-off on Wall Street on Friday when the S&P 500 slumped nearly 2%.
Read more: Stock markets: Four key trends that will impact share prices
Michael Hewson of CMC Markets said: “Friday’s move lower in US markets appeared to coincide with comments from US National Security Advisor Jake Sullivan who urged any remaining Americans in Ukraine to leave immediately, and that a Russian invasion could come any day.
“The US also ordered the departure of all US soldiers in Ukraine to leave the country immediately in case they get caught up if hostilities break out.”
Asian stock markets fell overnight, with the Nikkei (^N225) more than 2.2% down in Japan, the Hang Seng (^HSI) falling 1.4% and the Shanghai Composite (000001.SS) closing 1% lower.
Watch: Ukraine-Russia crisis: Bombs will drop on Ukraine minutes after Putin gives order, armed forces minister says
,,,
