Russian market cracks 17% as Ukraine tensions intensify; Europe jittery

Russia warned there were no firm plans for a summit between US President Joe Biden and Putin. To add fuel to the fire, reports emerged that Russian forces killed a group of five saboteurs, who breached the country’s southwest border from Ukraine on Monday.

The US has long been arguing that incidents near eastern Ukraine could be used as a pretext for Moscow to attack its neighbour. A Russian invasion of Ukraine was a possibility.

Tracking the development, the RTS index that tracks 50 top Russian stocks in dollar terms on the Moscow Stock Exchange, nosedived about 230 points or 16.67 per cent to 1,160.24.

There was fear that the West would cut off dollar access to Russian companies. The Russian ruble slumped to 78 rubles to the US dollar.

Wall Street was shut for the day on account of public holiday, but S&P500 stock futures fell 0.7 per cent, and Nasdaq futures were down over 1 per cent.

French CAC40 plunged 2.07 per cent while the German Dax was down 1.94 per cent. Euro Stoxx 50 sank 2.13 per cent. UK’s FYSE100 restricted losses at 0.4 per cent. The Spanish IBEX35 fell 0.7 per cent.

“While the US is consistently trying to engage with Russia, there is no cool off visible yet, and there is no update on the proposed meeting between them,” said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.