Investing
Global stocks slide and gold climbs as Ukraine crisis escalates
Russian shares dropped to a five-year low yesterday, weighing on global markets, while the gold price jumped as the Ukraine crisis intensified.
Russia’s Micex index shed 11% on Monday while the ruble plunged to a record low against the dollar and the euro after President Putin sent troops into the Crimea peninsula, which is part of Ukraine.
There has been severe unrest in Ukraine in recent weeks, culminating in anti-government protests in Kiev which led to President Viktor Yanukovych being ousted from office. The Russian military’s move into the Ukraine panicked markets, as fears grew the conflict could spiral.
Russia’s central bank hiked interest rates from 5.5% to 7% in a bid to halt the ruble’s downward slide and prevent inflation, but this was not enough to stabilise the currency.
The yield on the ten-year dollar-denominated Ukrainian bond jumped to more than 10% and the currency, the hryvnia, dropped sharply.
Yields on US treasuries fell to a one-month low of 2.59% while the gold spot price climbed to $1,354.80 and US gold futures jumped 2.2% to $1,350 per troy ounce.
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US stocks tumbled in tandem with the Russian market, with the S&P 500 falling 0.74% to 1,845 and the Dow 0.9% lower at 16,168.
The EuroStoxx 50 shed 3% while the FTSE 100 was 1.49% down at 6,708.
The MSCI All Country World fell 1.4%, while emerging market stocks fell 1.7%.
However, oil held up despite the turmoil, with Brent crude remaining around the $110 per barrel mark.