European shares slipped into the red at lunchtime on Friday as Russia started shelling cities in western Ukraine and peace talks appeared to be making little progress.
The pan-European Stoxx 600 index was down 0.73% with markets in France and Germany down more than 1.5%. Russia’s President accused Ukraine of dragging out negotiations by tabling “unrealistic” proposals, media reports stated.
Russia’s invasion of Ukraine and increased sanctions on Moscow and its supporters helped drive a rise in oil prices as investors feared supply disruption. Brent crude traded at around $108 a barrel having hit $139 last week.
Traders were also eyeing a phone call between US President Joe Biden and China Premier Xi Jinping later Friday with media reports stating Washington would warn Xi that Beijing will pay a price if it supports Russia.
“With the corporate world having built up a solid fortress to isolate Russia from the global economy, the US clearly wants to ensure Russia can’t find an escape route to avoid the effectiveness of sanctions,” said Hargreaves Lansdown analyst Susannah Streeter.
In equity news, Vodafone rose after a report that global infrastructure funds have approached the telecom giant to invest in its $16bn mast company Vantage Towers.
