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Russia’s invasion of Ukraine rattled global equity markets, all of which fell after Russian troops moved into Ukraine by land and sea.
The Dow Jones index opened 800 points lower on Thursday amid fears that surging commodity prices would add more to inflationary pressures and slower economic growth. Dow Jones is now down by more than 10% since its all-time high close in early January and set to confirm the index is in a correction. The NASDAQ index fell by over 3% at the opening, but later erased some losses to trade down by 0.6% as of 10:23 a.m. The NASDAQ is close to a bear market, which occurs when an index falls by 20% or more compared to the record closing level. The S&P 500 was also down on Thursday, continuing its correction.
Equity markets in Europe were even deeper in the red. The FTSE 100 was plunging by 3.6% at 3:30 p.m. London time, the main index DAX in Frankfurt was falling by 4%, and CAC 40 in Paris was also down more than 3.6%. Bank stocks plummeted, with shares of European banks with exposure to Russia plunging by double digits as the United States and the EU are preparing “severe sanctions” against Russia.
While equities tumbled, commodities surged. Crude oil, natural gas, wheat, nickel, aluminum, and palladium—you name it, it was soaring today over fears of disruptions of supplies due to either additional harsh sanctions against Russia or Russia retaliating by restricting exports.
Market participants flocked to safe-haven assets such as the U.S. dollar and gold, while cryptocurrencies crashed.
The rally in gold, which jumped the most in over 18 months, “was supported by a drop in US bond yields as investors took shelter from the carnage unfolding in the stock market,” Saxo Bank said in a commentary early on Thursday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.