Russia’s attacks on Ukraine’s main cities and uncertainties about the unfolding conflict in the region are fueling a new wave of nervousness among global investors.
The main stock exchanges in Europe and the United States returned to negative territory this Tuesday (1st), while the dollar maintained its sharp appreciation against the Russian ruble.
The US stock index S&P 500 fell 1.55%, the technology Nasdaq lost 1.59% and the Dow Jones lost 1.76%.
Citi shares closed down 1.1%, after slumping 4.4% the day before. The bank disclosed that it has nearly $10 billion in exposure to Russia through loans, government debt and other assets, partially held by its retail bank in the country.
Among European stock indices, London’s FTSE 100 closed down 1.72%, and Paris’s CAC was down 3.94%. Frankfurt’s DAX fell 3.85%.
Despite the losses, BlackRock understands that the Russian invasion could represent a more positive scenario for developed market stocks.
The largest global manager in the market with around US$ 10 trillion in assets, BlackRock assesses that the Russian invasion could make central banks not be as aggressive as the market was predicting in the fight against inflation, which could open space for a positive performance of developed market stocks.
“We believe that market expectations about interest rates have become excessive and created opportunities in stocks”, say the strategists of the global manager, in a report published on Monday (28).
According to them, the conflicts in Eastern Europe reduced the main risk for the manager’s investment theses for 2022, of an aggressive monetary tightening by the US central bank.
On the other hand, the Russian currency ruble, which yesterday suffered a fall of more than 20% against the US dollar, had a new session of strong depreciation, with a drop of approximately 9% this Tuesday.
The Russian central bank even doubled the country’s interest rate to 20% in an attempt to curb the sale of rubles on the market, in response to Western sanctions that froze Russia’s international reserves.
As it happened the day before, the Moscow Stock Exchange remains closed on Tuesday. The local BC will release a statement on Wednesday informing about the decision to reopen the stock market in the country.
In any case, shares of Russian companies traded on the London Stock Exchange underwent a sharp repricing by investors. The shares of the bank Sberbank plunged 80.1%, after having already retreated 74% in the previous session.
In addition, in the wake of the potential oil supply shock due to the war, the commodity is once again trading above US$ 100 (R$ 513.88) per barrel. The Brent contract advanced 5.6% this Tuesday, at US$ 106.64 (R$ 548.00).
TotalEnergies announced on Tuesday that it will no longer fund projects in Russia, following moves by Shell, BP and Norway’s Equinor to exit positions in the energy-rich country.
The Brazilian Stock Exchange remains closed due to the Carnival holiday. Operations in the local market will resume on Wednesday (2), from 1 pm.
The Dow Jones Brazil Titans 20 ADR Index traded on the American market, which reflects the performance of the main ADRs (American Depositary Receipt) of Brazilian companies, rose 0.28%, after having increased 0.32% the day before.
The movement of the Brazilian stock index was supported by the rise in commodity exporters. Petrobras’ ADRs appreciated 2.73% and Vale’s ADRs increased 2.00%, driven by the increase in raw material prices in the international market.
with Reuters
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