Asia markets hit a 16 month low as news emerged of the attack on the The Zaporizhzhia Nuclear Power Station. Asian equities and the euro slumped on Friday when Russian forces heightened investor fears about the escalating conflict, spiralling oil prices ever upwards.
European bourses set for a weak kick off as Euro Stoxx 50 futures while German DAX futures lost 2.6% and FTSE futures shed 1.4%. Despite the fire at an adjacent building being put out investors remain jittery about the conflict.
Oil prices jumped today after steadying up by close of play on Thursday, with the market also focused on whether the OPEC+ producers, including Saudi Arabia and Russia, would increase output from January.
Reuters reports that Brent crude futures for May rose to as much as $114.23 a barrel and were last up 0.5% at $111. The contract fell 2.2% on Thursday. There was no let-up in other commodities also, with Chicago wheat futures jumping nearly 7%, taking the weekly gain to more than 40% on supply side worries.
Investors are focused on the potential for further sanctions against Russia to disrupt supply chains, reports the Financial Times. This is likely to cause a sustained surge in commodity prices, push the eurozone economy into stagflation and hobble the US recovery from the coronavirus crisis.
Russian natural gas, oil and coal provide between a fifth and a quarter of western Europe’s primary energy supply according to analysis by research house Gavekal. The annual pace of eurozone inflation is forecast to top 6 per cent this month, with analysts also warning of a hit to corporate earnings from higher input prices.
As the impact of the war and sanctions on Russia reverberate through global markets, investors have also been deliberating on whether central banks in the US and Europe might reverse earlier plans to raise rates.
♦ CNBC reports
♦ CNN Business