Global stocks tumbled on Friday in the wake of concerns of deterioration of the Ukraine crisis and as Amazon’s earnings report roiled markets.
Shares in global markets dropped drastically as Russia’s Foreign Minister Sergey Lavrov claimed that Europe and the US were devising ways to control Ukraine, and US president Barack Obama said he would get in touch with key allies in Europe later on Friday to discuss developments that have taken place after an agreement was reached last week in Geneva to reverse the tensions in Ukraine.
As Time Colonist says, an additional round of measures against Russia is being considered.
Ratings agency Standard & Poor’s downgraded Russia’s debt to one level above junk and said the country’s economy could suffer further outflows of domestic and foreign capital.
The move affected Russian markets as Russia’s central bank responded by increasing its interest rate. Moscow’s MICEX index closed down 1.6% as the rubble plunged 0.9% lower against the dollar, trading at 36.7 units for every dollar.
“While there may be an element of profit taking driving markets lower today, I think a bigger contributing factor is the recent flare up in eastern Ukraine and the war of words now taking place between the U.S. and Russia,” market analyst Craig Erlam of Alpari said.
The blue-chip FTSE 100 index of the UK dropped 0.3% and closed at 6,685.59. DAX of Germany lost 1.5% to close at 9,401.55. The CAC 40 in France declined 0.8% to 4,443.63.
Earlier in Asia, the Shanghai Composite Index of leading China stocks lost 1% 2,036.52. Hang Seng of Hong Kong shed 1.4% to 22,238.06.
But Japan’s Nikkei 225 rebounded 0.2% to 14,429.26.
According to Reuters, the MSCI’s index of global stocks plunged 0.7%.
The dollar dropped 0.2% to 102 yen on Friday, the lowest in one week.
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