Wednesday’s rally was short-lived: US and European stocks fell again on Thursday on the lack of diplomatic progress towards a ceasefire in Ukraine, inflation in the United States and the normalization of monetary policy in the euro zone.
The New York stock market ended lower, although the drop in the price of crude allowed it to limit losses. The Dow Jones thus yielded 0.34%, the Nasdaq technology index 0.95% and the S&P 500 0.43%.
After a short-lived respite on Wednesday after several days of decline, European stock markets ended up in negative territory again.
The stock markets of Frankfurt and Paris plummeted 2.93% and 2.38%, respectively, while that of London fell 1.27%.
For its part, the Ibex 35 of Madrid closed the session with a decrease of 1.15%, although it held the 8,000 points. The FTSE Milan index suffered the worst part, falling 4.2%.
“The latest talks between Russia and Ukraine have made no progress in ending the war,” said Fawad Razaqzada, an analyst at ThinkMarkets. “Markets have reacted in the way you would expect.”
– Warnings from the US and Putin –
US Treasury Secretary Janet Yellen said Thursday that the United States and its European allies could impose new sanctions on Russia for “atrocities” against civilians that “appear to be escalating.”
Russian President Vladimir Putin declared on his side that the sanctions against his country could cause an increase in world inflation due to the rise in food prices.
“If it continues like this, there will be serious consequences … for the food sector as a whole, the increase in inflation will be inevitable,” he told a government meeting, after Russian fertilizer exports were suspended.
Russian fertilizers are not affected by Western sanctions. However, the financial and supply chain sectors are, which affects Russia’s export capacity.
“If they continue to create problems for us to finance this work, to ensure it, in logistics, the delivery of our products (…) then prices are going to rise more and more, and this will be noticeable in the price of the final product, food “, he pointed.
– Surprises in the Euro Zone –
In the Euro Zone, when investors expected the monetary policy discourse to soften, the European Central Bank decided on Thursday to speed up the gradual withdrawal of its debt purchases in the face of soaring inflation.
Another surprise: the ECB no longer claims, as it did until now, that after the end of the debt purchases there will automatically be a hike in its reference rates, which would be the first since 2011.
The increase could, according to the president of the organization, Christine Lagarde, occur “the following week” or “months later” depending on economic data.
– Oil down –
Oil prices fell on Thursday, after Putin assured that Russia maintains its hydrocarbon deliveries despite Western sanctions.
A barrel of North Sea Brent for May delivery fell 1.62% to $109.33.
Meanwhile, the barrel of West Texas Intermediate (WTI) for delivery in April fell 2.46% to 106.02 dollars.
The euro, for its part, lost 0.79% and traded at 1.0988 dollars.
Bitcoin (-5.88% to $38,429) lost much of its gains on Wednesday.
