Global Markets Suffer As Risk-Off Sentiment Dominates

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Global Markets Suffer As Risk Off Sentiment Dominates
Global Markets Suffer As Risk Off Sentiment Dominates

Global Markets Suffer As Risk Off Sentiment Dominates

The Ukrainian crisis is not just dominating the news, but also investor sentiment across the globe. Despite a number of positive data releases coming out of the U.S. and Europe, stock markets are down across the board as risk averse investors reduce their exposure to global equities.

With tension rising in Ukraine throughout last week, investors went into the weekend hoping for a peaceful and political conclusion to the crisis. This was not to be the case however, as Russian troops moved into the Crimean peninsula and the Ukrainian leadership mobilised its entire army in response. Ukrainian prime minister stated on Sunday that the nation is on “the brink of disaster,” urging Russian President Vladimir Putin to pull his troops out of the region, however Putin has not responded.

The standoff translated into severe losses throughout Monday’s European morning session, which look set to continue as the U.S. markets head into lunch and the afternoon session.

As things stand, the S&P 500 is down 15.55 points (0.84%) at 1,841.95, the NASDAQ100 is down 35.45 (nearly 1%) at 3,659.80 and the Dow Jones 30 is down 156.21 (just shy of 1%) at 16,165.50.

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Across the Atlantic, the European markets are also down, with the DAX 30 the day’s biggest loser. Currently the German index sits at 9,408.50, a 283.58 point (2.93%) drop from the day’s open. This decline comes despite a better than expected German manufacturing PMI figure—54.8 versus an expected 54.7—illustrating the influence of an overarching macroeconomic event on market sentiment.

The FTSE 100 is also down, fueled by both the Ukrainian crisis and a worse than expected lending figure, which came out at £2.1B versus a forecast of £2.5B. The index is down 101.20 points (1.49%) at 6,708.30 as the European afternoon session heads into Monday’s close.

All said, the risk-off sentiment that is dominating the markets at present will likely hold as the week plays out as. Even if achievable, any political resolution to the standoff between Russia and Ukraine will take some time, meaning there could be further downside in the global stock markets between now and Friday.

To contact the reporter of this story: Samuel Rae at samuel@forexminute.com