By Anna Peel. Originally published at ValueWalk.
“Financial markets took a turn for the worse after warnings from the US administration that there is evidence on the ground that Russia is moving towards an imminent invasion of Ukraine. Reports of firing in a border region and accusations that Moscow is orchestrating a false flag operation, an intent to pin the blame for starting conflict on Ukrainian forces, has ratcheted up tensions and led to more investors seeking less risky positions. The price of gold, seen as a safe haven in times of crisis has risen by another 1.37% to $1896 an ounce, an 8 month high.
Q4 2021 hedge fund letters, conferences and more
Financial Markets Take Turn For The Worse
Equity markets dropped with US indices falling on the open and the FTSE 100 lost more ground with once again travel stocks bearing the worst of the losses. Data out from Eurocontrol and the ONS earlier had showed the sector flying into brighter skies with UK daily flights up 17% compared to the previous week, with the lift off helped by half term holiday bookings. It’s feared that recovery for airlines could be derailed if a conflict breaks out on the doorstep of Europe. This concern has seen British Airways fall by around 4%, Wizz Air Holdings PLC (LON:WIZZ) by more than 5% and Rolls-Royce Holding PLC (LON:RR), so highly reliant on the commercial air travel, dropped 2.5%. Cruise company Carnival plc (LON:CCL) also saw a 2.5% fall in its share price as worries mount about travellers’ sentiment.
EVRAZ plc (LON:EVR), the Russia focused mining and steel production company was the biggest faller on the FTSE 100 amid heightened worries about the effect sanctions will have on the business. For now the increased tensions haven’t pushed up the oil price, instead Brent crude dropped around 2.2% to $92.6 dollars a barrel. The price is proving much more sensitive to the better prospects for Iranian output, with negotiators of the Iran nuclear deal saying an agreement is closer than ever. An accord would provide supply side relief but fresh falls in the oil price are still likely to be limited by the ever more tense situation surrounding Ukraine.”
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
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