Concerns about the global fallout from a conflict with Russia in recent weeks have exacerbated jitters among investors who were already concerned about the impact of rising interest rates. The S&P ended the previous session in a technical correction, meaning it was down more than 10 per cent from the record high set in early January.

The Vix index, a measure of expected volatility in the S&P 500, rose to 29, its highest level of the month and well above its long-run average of around 20, suggesting investors believe the uncertainty will continue.

European stocks were similarly volatile, with the continent-wide Stoxx 600 index swinging from a 1.2 per cent gain earlier on Wednesday to close down 0.3 per cent for the day.

Ukraine was preparing to impose a national state of emergency on Wednesday as President Volodymyr Zelensky called up reserve troops and his administration pleaded with the west to hit Russia with even tougher sanctions.
Ukraine conflict: the risks looming for investors

Germany halted certification of the Nord Stream 2 Russian gas pipeline on Tuesday, while US President Joe Biden said the US had cut Russia off from western financing and announced measures to target two of the nation’s largest financial institutions.

Several Ukrainian government websites were also temporarily shut down and banking services disrupted on Wednesday by a fresh wave of cyber attacks, which experts have previously warned could precede further Russian aggression.

The mounting tensions helped to propel Brent crude, the international oil benchmark, to a high of $99.50 a barrel as traders also grappled with the possibility of disrupted supply from Russia. Brent fell 0.1 per cent to $96.71 on Wednesday; the marker has gained more than 3 per cent so far this week.

European natural gas contracts gained more than 10 per cent to €87.9 per megawatt hour.

Andreas Billmeier, European economist at Western Asset Management, said there was “some relief” among investors that sanctions levelled at Russia “so far” would not disrupt the global economy.

“It could have been worse, for example by taking Russia out of Swift,” he said, referring to the international payments system that underpins trillions of dollars worth of transactions each year.

Spot gold, a popular investment during heightened geopolitical tensions, added 0.6 per cent to $1,901 an ounce.

However, not all assets seen as safe havens rallied, with government bond markets remaining calm. The yield on the 10-year US Treasury note rose 0.03 percentage points to 1.97 per cent, reflecting lower prices. The yield on the 10-year German Bund rose 0.01 percentage points to 1.47 per cent.

The dollar index, which measures the US currency against six others, picked up 0.2 per cent.


By block head

Block Head is a blockchain journalist.