Stocks deepen week’s losses as Ukraine invasion escalates

LONDON, March 4 (Reuters) – Shares prolonged their losses for the week on Friday as traders piled into authorities bonds and gold for canopy whereas scrutinising the newest twists in Russia’s escalating invasion of Ukraine, which included seizing an enormous nuclear plant.

Industrial metals, grains and oil gained whereas Asian shares mined 16-month lows after information of a fireplace, later extinguished, close to a Ukraine nuclear facility following preventing with Russian forces. learn extra

In Europe, the STOXX (.STOXX) index of 600 corporations was sank 1.4% to 431 factors, hitting a brand new low for the 12 months because the benchmark eyed correction territory, that means down 10% from its highs.

The MSCI All Nation shares index (.MIWD00000PUS) shed 0.6% to 686 factors, down about 10% for the 12 months.

With a 25 foundation level rate of interest enhance by the Federal Reserve later this month now all however sure, financial information like U.S. non-farm payrolls on Friday earlier than the opening bell on Wall Avenue had been taking a again seat, stated Michael Hewson, chief markets analyst at CMC Markets.

“The market is pushed a lot by information headlines danger that the basics barely matter in the meanwhile,” Hewson stated.

Although U.S. charges had been set to rise, traders had been nonetheless piling into authorities bonds for security, he stated.

“You’ve escalating inflation danger, you have got enormous uncertainty about what is going on to occur subsequent on the headline entrance, and a Russian president who would not rule out nuclear weapons – that could be a fairly poisonous backdrop,” Hewson stated.

Crude oil rebounded, and aluminium touched a document excessive of $3,850 a tonne in London because the intensifying battle in Ukraine stocked fears of a provide squeeze within the steel from Russia, a serious producer.

Nickel touched an 11-year excessive for related causes.

“Folks got here into this case pondering commodities had had sufficient of a run already however the struggle has added a brand new lease of life,” stated Mike Kelly, head of worldwide multi-asset at PineBridge Investments.

“Skyrocketing inflation is what individuals worry and the very best hedge for that’s power and industrial metals,” stated Mike Kelly, head of worldwide multi-asset at PineBridge Investments.

In foreign money markets, the euro misplaced additional floor and was set for its worst week versus the greenback in almost two years because the prospect of sustained excessive commodity costs continued to tug on expectations of European financial progress. learn extra

S&P 500 futures and Nasdaq futures had been down round 0.5%.

ASIAN SLUMP

The hearth that broke out in a coaching constructing close to the Zaporizhzhia nuclear energy plant, the biggest of its form in Europe, throughout preventing between Russian and Ukrainian forces was later extinguished, authorities stated on Friday. learn extra

Whereas that helped ease a few of the preliminary panic that hit markets in Asia, traders stay extraordinarily anxious concerning the battle.

“Markets are apprehensive about nuclear fallout. The chance is that there’s a miscalculation or over-reaction and the struggle prolongs,” stated Vasu Menon, govt director of funding technique at OCBC Financial institution.

MSCI’s broadest index of Asia-Pacific shares ex-Japan (.MIAPJ0000PUS) tumbled as a lot as 1.5% to 585.6, the bottom stage since November 2020, taking the year-to-date losses to 7%.

Inventory markets throughout Asia had been in a sea of pink, with Japan (.N225) shedding 2.2%, South Korea 1.1%, China (.SSEC) 0.9% and Hong Kong 2.5% whereas commodities-heavy Australia (.AXJO) was down 0.6%.

Traders sought refuge in safe-haven U.S. Treasuries, sending yields on benchmark 10-year yields decrease to 1.788%.

Oil costs firmed, with the market additionally targeted on whether or not the OPEC+ producers, together with Saudi Arabia and Russia, would enhance output from January.

Brent crude futures for Could rose to as a lot as $114.23 a barrel and had been final up 0.2% at $110.69. The contract fell 2.2% on Thursday.

On the financial information entrance, the U.S. employment report on Friday is predicted to point out one other month of robust job progress, with a wave of Omicron COVID-19 variant infections considerably diminished.

Gold costs additionally rose on Friday, eyeing their greatest weekly acquire since Could 2021. Spot gold edged up 0.2% to $1,939.

Reporting by Anshuman Daga, Saikat Chatterjee and Sujata Rao; Modifying by Edwina Gibbs and Sam Holmes

: The Thomson Reuters Trust Principles.