LONDON (Reuters) -Wednesday’s stock markets saw some small gains, but oil prices kept going up and the rouble fell, as Russia showed no signs of stopping its attack on Ukraine.
A week after Vladimir Putin gave the go-ahead for a full-scale invasion of Ukraine, Western countries added more sanctions on Russia.
President Joe Biden of the United States barred Russian jets from entering US airspace, telling Putin that he had “no clue” what was coming.
European markets made some modest gains after opening in the red. At 1232 GMT, the STOXX 600 index was up 0.1 percent on the day, while Germany’s DAX was also up 0.1 percent.
The S&P 500 and Nasdaq 100 futures were both up 0.5 percent.
European banking stocks have risen a little after Russia’s Sberbank forced its European subsidiary to close.
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The MSCI global equity index, which tracks the performance of stocks in 50 countries, fell 0.3 percent on the day.
After failing to rapidly depose Ukraine’s government for over a week, Western nations are concerned that Moscow is using new, much more aggressive means to blast its way into towns it had anticipated easily capturing. [nL1N2V50G9]
“The fact that it is enduring and getting more vicious is definitely altering the growth forecast, as seen by the market’s reaction, with stocks falling and bonds appreciating strongly,” said Antoine Lesne, head of ETF strategy and research at State Street’s SPDR ETF (NYSE: STT).
Oil prices soared, with Brent oil reaching $113.02, its highest level since 2014, and US crude approaching its 2013 high.
In the United States, the 10-year yield was 1.7684 percent, slightly higher after falling dramatically in the previous two days.
Germany’s 10-year government bond rate increased by 6 basis points. There was less demand for the safe-haven asset on Tuesday than there was at the same time last year.
According to Lesne of SPDR, exchange-traded fund (ETF) flows increased in the United States last week as investors used them to take risk-off positions, but were “more subdued” in Europe. Lesne said that he has not halted any funds that have Russian exposure.
According to him, the best-performing ETFs were those invested in European healthcare and utilities, as well as energy-related ETFs.
“BlackRock Inc. (NYSE:BLK), the world’s largest asset manager, says it is talking with regulators, index providers, as well as other market players about how to help clients get out of holdings in Russian equities where it’s OK.”
After falling to a record low of 117 per dollar on Tuesday, the rouble was trading roughly 3.5 percent lower against the dollar on the day, at 108.7.
For foreign investors who own rouble-denominated bonds, known as OFZ, they’re stuck with them. The Russian central bank has stopped paying out coupon payments and a key international settlement mechanism has stopped taking Russian assets.
According to JP Morgan analysts, Russia’s sanctions have “substantially elevated the probability of a Russian government hard currency bond default.”
The dollar index rose 0.2 percent.The euro fell 0.2 percent to $1.11025 against the Swiss franc, its lowest level in seven years.