The tensions between Russia and the Ukraine have taken a new turn with a possible first direct confrontation in both countries. The Russian army destroyed two Ukrainian armored vehicles in the Rostov region, on its territory, and killed five people who tried to violate the border, according to the Interfax agency. Moscow had already cast doubt this morning on the prospect of a summit between Vladimir Putin and Joe Biden.
The Kremlin spokesman, Dmitry Peskov, indeed indicated that there was no ” concrete project » and that a meeting is « premature for now, adding that Vladimir Putin has agreed to discussions at the level of foreign ministers. However, he did not rule out the possibility of discussions or a meeting with the American president if necessary.
Around 3:30 p.m., the Cac 40 fell 1.73% to 6,809.70 points after gaining up to 0.82% this morning, in a business volume of nearly 2 billion euros. In Frankfurt, the Dax lost 1.61% and, in Moscow, the index Moex (ex-Micex) fall of 9.28%. Wall Street is closed on Monday for Presidents’ Day.
Diplomatic efforts strained
President Biden had accepted this weekend the principle of a meeting with Vladimir Putin proposed by Emmanuel Macron in an attempt to ease tensions. This summit is nevertheless conditioned by Washington on Russian non-intervention. The topics discussed have yet to be defined during a meeting between US Secretary of State Antony Blinken and his Russian counterpart Sergei Lavrov, scheduled for Thursday. In this context, so-called safe haven assets such as gold are subject to high volatility. The ounce of precious metal came close to 1,910 dollars this morning before returning to around 1,893.
On Friday, the announcement by pro-Russian separatist leaders of the evacuation of civilian populations from eastern Ukraine to Russia had revived fears of an escalation. Emmanuel Macron spoke with the Ukrainian president on Saturday, before doing the same on Sunday with Vladimir Putin, twice, then with Joe Biden.
Another subject of concern for the markets is the prospect of a normalization of the US Federal Reserve’s monetary policy against a backdrop of soaring prices. The probability of a 50 basis point hike in the Fed funds rate in March is no longer favored by investors. The latter will nevertheless closely monitor, on Friday, the statistics of income and expenditure of American households, and in particular the PCE component of personal consumption expenditure, the measure of inflation most followed by the Fed.
Technology and automotive under pressure
” Global statistics and central banks’ stance on monetary tightening are overshadowed by Ukraine, with markets nervously awaiting the next announcement sums up Su-Lin Ong of Royal Bank of Canada.
Automotive, technology and industrial goods stocks suffered the biggest sectoral declines in Europe with declines of 2.7%, 2.6% and 2.2% respectively for the associated Stoxx 600 indices. Teleperformance loses 5.4%, Renault 2.6% and Alstom 3.6%.
Second capitalization of the Cac 40, L’Oreal down 3.5%. Societe Generale downgraded the cosmetics giant from “buy” to “sell”.
Up more than 4% in the morning, Faurecia now yields 4.7%. The automotive supplier says it is aiming for an improvement in its margin and its turnover for 2022, after having recovered its results in 2021, despite the impact of the semiconductor crisis. For Oddo-BHF analysts, the accounts are “largely” in line with expectations, “no more, no less”.
same for me Worldline (-2.1%). The payments specialist has announced that it has entered into exclusive negotiations with Apollo funds after receiving a firm purchase offer for its terminals, solutions and services (TSS) activities. The fund has presented a binding offer to purchase 100% of this division for a price comprising an amount of 1.7 billion euros and preference shares of up to 0.9 billion euros. based on the future value creation of TSS “.