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While Russia appears to have borne the brunt of the fears of war – its MICEX index plummeted 10 per cent with shares of local conglomerates falling between 6.5 and 9.8 per cent – markets in recession-prone Europe and Asia also took a beating.
Germany’s DAX was down 2.3 per cent in Monday trading; London’s FTSE dropped by 1.8 per cent, while France’s CAC 40 was down by 1.8 per cent.
In Asia, Chinese exchanges in Shanghai and Shenzen were up but Hong Kong’s Hang Seng dropped 1.5 per cent at closing. Japan’s benchmark Nikkei fell 1.3 per cent.
Gold and oil traded up, meanwhile.
The market turmoil comes amid existing fears over prospects in emerging markets, which have been taken for a roller coaster ride in the past nine months as the US Federal Reserve first promised and later delivered on its intention to terminate its monetary policy stimulus programme known as quantitative easing.
Turkey, South Africa, Hungary, Russia, India, Brazil, Argentina and a host of Latin and South American countries have been experiencing moderate to sharp currency sell-offs, as a result, and capital outflow has been steadily rising in some emerging markets, reaching more than $12 billion in January.
The Ukraine crisis is also likely to impact energy futures. Most of Europe currently relies on Russian gas that is carried via pipeline through Ukraine. A conflagration with Russia could send rippling fears about gas shortages among investors.
On Monday, the first day of trading in the UK since Russian forces were approved by parliament in Moscow to be deployed in the Ukraine, natural gas prices rose about 6 per cent.
Russia’s gas giant Gazprom also saw its shares tumble by 10 per cent.