European shares slumped at the open on Monday on fears Russia could invade Ukraine at any moment, with travel stocks down sharply and oil prices rising.
The pan-European Stoxx 600 index was down 2.5&% in early deals, with Germany’s DAX and France’s CAC 40 off by 3%. Asian shares were also lower overnight.
Oil prices hit their highest levels in more than seven years on worries that any invasion of Ukraine could trigger US and European sanctions on Russia and disrupt energy exports. Brent crude was last up more than $1 to above $95 a barrel.
Western leaders are desperate to avoid a war, with German Chancellor Olaf Scholz travelling to the Ukrainian capital Kyiv on Monday and then to Moscow on Tuesday for talks with Russia’s Vladimir Putin.
Comments from San Francisco Federal Reserve Bank President Mary Daly on Sunday appeared to dampen speculation that the Fed could deliver an aggressive 50 basis point rate hike in March to contain inflation.
Being too “abrupt and aggressive” with rate increases could be counter-productive, she said.
In equity news, travel stocks were all lower on Russia/Ukraine tensions, with Wizz Air, IAG, Carnival and Lufthansa all marked down.
Shares in Swiss chemical company Clariant fell almost 15% after it postponed its annual results as investigators probe whistleblowers’ allegations that some staff manipulated accounts in 2020 and 2021 to help meet financial targets.
Commerzbank fell 7.5% after Germany’s finance minister said the government would not keep its stake in the lender in the long run.
