The Russia-Ukraine cold war has almost turned into World War III. The conflicts between the two countries are increasing and affecting the whole world, including the stock market. World markets were set for another confused week after the Western Nations announced a harsh set of sanctions to punish Russia for its decision to invade Ukraine as the fighting intensifies for the fourth day.
US Stocks have fallen nearly 8% this year, the worst annual start since 2009, and worries over the growing conflicts in Ukraine have shaken the market across the world. Although Wall Street ended higher on Friday with major indices between 1.5-2.5%, analysts expected markets to come under selling pressure on Monday.
On this fluctuation, Peter Kinsella, global head of FX strategy at UBP said ━ “Nobody likes uncertainty, investors certainly dislike uncertainty, and we are looking at the pretty protracted conflicts.”
Russia’s military vehicles reached into ‘Kharkiv’, Ukraine’s second-largest city, on Sunday and exploited the rock oil and gas installation. This shows that the situation is getting worse.
In this response, the United States and its allies move to block some Russian banks’ access to the SWIFT international payment system, including the restrictions on central banks’ international reserves that will be implemented soon.
Some Dialing Down Risks
The latest crisis is also likely to impact energy and grain prices. Brent Futures topped $105 per barrel and wheat futures scaled to levels last seen in mid-2008 on Thursday before somewhat easing back on Friday.
According to analysts, Russia’s main stock index on Friday dropped to 20% from 33% on Thursday and is expecting to see more pain on Monday.
“There is an increased risk of Russian debt default, last seen in 1998, as a result of weekend announcements,” said the head of FX strategy of National Australian Bank, Ray Attrill.
The Russia-Ukraine War will affect the global market, including India. The Indian Market had already seen a fall last week when the Russian President, Vladimir Putin, ordered the attack on Ukraine.