Stocks fall, ruble dives as Russia sanctions hit world markets
The Russian ruble fell to fresh record lows on Monday while world stocks slid and oil prices jumped, as the West ramped up sanctions against Russia over its Ukraine invasion, with steps including blocking banks from the SWIFT global payments system.
Russia’s central bank hiked its key interest rate to 20% from 9.5% to bolster the ruble and fight inflation. Authorities told export-focused companies to be ready to sell foreign currency as the ruble slid 32% before recouping about half its losses.
As an economic crisis loomed in Russia, the fallout of tougher sanctions from the West imposed over the weekend rippled across financial markets, especially in Europe, where the pan-regional STOXX 600 index slid 1.10%.
On Wall Street, the Dow Jones Industrial Average fell 0.93%, the S&P 500 lost 0.65% and the Nasdaq Composite added 0.04% as investors bet the Federal Reserve won’t be so aggressive hiking interest rates. MSCI’s all-country world equity index was down 0.44%.
Markets are likely to remain choppy in the near term, analysts said. While valuations have fallen and some risks have been priced into the market, this is not a time to derisk, Solita Marcelli, chief investment office for the Americas at UBS Global Weather Management, said in a note to clients.
