updates
Dax recovers losses
Investors show strong nerves
02/22/2022, 12:06 p.m
Russia creates facts. For market observers, however, the fact that the stock market is recovering does not yet mean the all-clear. “We have not yet reached the worst-case scenario for the stock exchanges,” commented an asset manager. The focus now is on sanctions against Russia.
After the dispatch of Russian soldiers to eastern Ukraine cost the Dax more than two percent in one fell swoop in the morning, the leading index is recovering. “The news from the night sounded to many as if the Russians had invaded Ukraine on a broad front,” said a trader. This is not the case, so at least “panic hedges” are covered again. In addition, there are profit-taking from short sales that have already made up hundreds of points down.
The Dax even reached the green area again after the crash. The leading index gained 0.1 percent at lunchtime to 14,744 points. The morning shock abated somewhat because the West’s response has been relatively muted so far. With the United States, however, relations with Russia are likely to continue to deteriorate. US President Joe Biden wants to ban investments in these two regions. The situation in Ukraine does not bode well for Germany: Federal Economics Minister Robert Habeck has already emphasized that the German economy would be burdened by possible sanctions.
Strategists are worried if the oil price shoots above the $100 mark because of the Ukraine crisis. However, there is no sign of panic in the long-term contracts, as the market is now firmly expecting Iran to return as a supplier on the international oil market. Although the oil price is rising sharply in the morning, Brent is still trading just below the $100 mark. We are looking for the crisis currencies gold and dollar. The Bund futures premiums have so far been limited.
The worst case has not yet arrived
“We have not yet reached the worst-case scenario for the stock exchanges,” said asset manager QC Partners. If you want to get something positive out of the situation, it’s that Russia has so far only fired words and not cannons. The immediate use of weapons would certainly have led to an even more violent sell-off on the stock exchanges. The decisive factor will now be whether the West sees Russia’s steps to recognize the breakaway territories as an invasion or not. It is already clear that sanctions will be imposed on Russia.
Russia has recognized the self-proclaimed People’s Republics of Donetsk and Luhansk “Facts created. Now sanctions follow,” writes Jochen Stanzl, chief market analyst at CMC Markets, in a market commentary on the consequences for this market events: For the stock exchange it is now a question of what these sanctions will look like. First of all, it is important that Ukraine not a member of NATO is and the defense alliance therefore not have to respond militarily. “Therefore, in all likelihood, sanctions will remain.”
The European natural gas price has skyrocketed. Around 40 percent of the European Union’s natural gas imports come from Russia. It is questionable whether the EU will cut itself in the face of the already smoldering energy crisis and sanction natural gas imports, adds the analyst. “In all likelihood, it will be left with sanctions against people.”
With Russia’s recognition of the eastern Ukrainian “People’s Republics” of Donetsk and Luhansk as independent states, the Ukraine crisis has again intensified. Moscow has ordered the deployment of troops to the separatist areas and thus to Ukrainian national territory. Since the republics are not recognized internationally, this step represents a breach of international law and the formal termination of the Minsk Peace Agreement. A war is “not priced in,” warned ntv stock market reporter Corinna Wohlfeil in the morning. “The political situation is more risky than it has been for a long time,” agreed Thomas Altmann, portfolio manager at asset manager QC Partners.