world markets rebound

Risk on mood world markets rebound

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World stocks recovered somewhat on Friday from a sharp sell-off in the previous session. Investors appear to shrug off Russia-Ukraine concerns but analysts warned that sentiment will remain fragile.

Asia-Pacific shares mostly rose. In mainland China, the Shanghai Composite Index closed up 0.63% to finish at 3,451.41 while the Shenzhen component jumped 1.21% to 13,412.92 as the People’s Bank of China injected 300 billion yuan worth of liquidity into the banking system, far higher than the 10 billion yuan of expiring loans. Hong Kong’s Hang Seng index declined 0.56% to finish trading at 22,767.18. Japan’s Nikkei 225 Index jumped 2% to end trading at 26,476.50. South Korea’s Kospi Index advanced 1.1% to close at 2676.76. In Australia, the S&P/ASX 200 Index gained 0.1% to 6,997.80. Technology shares led the gains. New Zealand’s NZX50 moved up 1.6% to close at 11,923.38.

In Europe, stock markets also traded higher even as Russian troops were advancing toward Kiev. The Stoxx 600 closed up by 3.3%, a day after the pan-European benchmark reached its lowest point since the start of 2022. Germany’s DAX surged up 3.67% while France’s CAC40 closed 3.55% higher. The U.K.’s FTSE 100 soared 3.91%.

In economic news, the European Commission reported that consumer confidence in the eurozone continued to decline in February coming in at -8.8. Consumers’ views on their past financial situation deteriorated, as did, to a lesser extent, their intentions to make major purchases and appraisals of their future financial situation In the European Union as a whole, consumer sentiment dropped by 0.2 points to -10.0, also the weakest in eleven months.

Meanwhile, data from Destatis showed that the German Gross Domestic Product (GDP) contracted by 0.3% on quarter in fourth quarter of 2021. Considering full 2021, the German economy expanded 2.9%, above preliminary estimates of 2.8%.

In the US, stocks moved mostly higher in morning trading on Friday, the Dow Jones Industrial Average added about 765 points, or 2.3%. The blue-chip average is on track for its best day of the year. The S&P 500 advanced 1.9%. The Nasdaq Composite rose 1%.

The U.S. and its allies have imposed sanctions on Russia with retaliatory sanctions reported to be on the way.

In commodities, international benchmark Brent crude fell to below $97 per barrel, after rising to above $105 for the first time since 2014 in the previous session. West Texas Intermediate crude futures slipped to around $91 per barrel, as investors assess how the Ukraine crisis will affect fuel supply after news that  major crude exporter Russia is open to talks with Minsk.

The Kremlin reportedly said that Russian President Vladimir Putin is ready to send a delegation to Belarusian capital Minsk for negotiations with Ukraine.

Natural gas futures traded around $4.5 per million British thermal units, after hitting a three-week high of $4.9/MMBtu in the prior session

Gold prices slipped below $1,890 on Friday, losing their momentum from earlier in the session as safe-haven demand for the yellow metal ebbed.

Market watchers are rushing to price in the immediate fallout from the Russian-Ukraine military conflict and figure out how exactly the geopolitical fallout will hit cross-asset trades in the weeks to come.