EUROPEAN STOCK EXCHANGES OPEN SHARPLY LOWER
PARIS (Reuters) – The main European stock markets fell sharply at the start of the session on Monday, as new Western sanctions targeting Russia and Vladimir Putin’s decision to place Russia’s nuclear deterrent on high alert prompted investors to favor safe havens.
In Paris, the CAC 40 lost 3.1% to 6,542.92 points at 08:40 GMT. In London, the FTSE 100 lost 1.14% and in Frankfurt, the Dax fell 2.53%.
The EuroStoxx 50 index is down 3.17%, the FTSEurofirst 300 by 1.26% and the Stoxx 600 by 1.76%.
Futures contracts on the main American indices foreshadow for the moment a decline of around 1% for the Dow Jones and more than 1.5% for the Standard & Poor’s 500 as for the Nasdaq.
The continued fighting in Ukraine and the marked tightening of sanctions against Moscow raise fears of lasting disruptions in the markets and risk fueling inflation and slowing growth by encouraging higher commodity prices.
This context favors safe havens such as the dollar, which has appreciated by more than 0.6% against other major currencies, or government bonds, whose yields are down sharply, to 1.904% for US securities at ten years and 0.168% for the German Bund of the same maturity.
On the equity side, the European banking sector suffered the most marked decline at the start of the session: its Stoxx index lost 5.57%. In Paris, Societe Generale, the French bank most exposed to the Russian market, gave up 9.81%, BNP Paribas 8.37% and Crédit Agricole SA 5.6%.
Renault, shareholder of the Russian Avtovaz, parent company of the Lada automobile brand, also fell by 8.76%.
In London, the oil company BP lost 6.08% after the announcement of its withdrawal from the Russian market, which could result in exceptional charges of 25 billion dollars.
On the rise, defense stocks benefited from the announcement over the weekend of the supply of military equipment to Ukraine by the European Union and a sharp increase in the budget allocated by Germany to its defense.
The French groups Thales and Dassault Aviation gain 11.76% and 8.27% respectively, the British BAE Systems 13.63% and the German Rheinmetall 24.15%.
(Written by Marc Angrand, edited by Blandine Hénault)