EUROPEAN EQUITY UPDATE: Stocks slide as Russia moves in on Ukraine

Analysis details (09:44)

European equities kicked off the session with losses across the board (Euro Stoxx 50 -3.7%; Stoxx 600 -3.0%) as sentiment took a hit in APAC hours after Russian President Putin announced an operation into Ukraine. Unsurprisingly, it is countries that have exposure to the Russian economy feeling the pressure. Austria’s ATX (-5.0%), France’s CAC 40 (-3.6%), and Italy’s FTSE MIB (-3.7%) are the worst hit – with the banking sector posting the deepest losses. JPM has recently said Austrian, French, and Italian banks are thought to be most exposed to Russian sanctions. Energy-focussed names are conversely performing better as crude and nat gas prices surge. The overall sectorial picture tilts defensive with Healthcare, Utilities and Food & Beverages among those with the shallowest losses. In terms of some interesting individual movers, Anglo-Russian precious metals mining company Polymetal slumped over 40% on the Russia/Ukraine crisis, whilst defence names Rheinmetall (+3.8%), BAE Systems (+1.9%) and Thales (+2.0%) are bid. Russian exchanges are also coming under significant pressure, with MOEX seeing trading halts as the index fell by 30%. The European pre-market was busy with earnings, although the macro narrative may overshadow some of the backwards-looking metrics. Nonetheless, the morning saw numbers from Anglo American (-0.2%), AXA (-3.7%), Lloyds (-8.0%), Rolls-Royce (-12.3%), Deutsche Telekom (-4.0%), Mercedes-Benz Group (-4.7%), AB InBev (+0.1%), Pirelli (-6.1%), and Telefonica (+0.2%), to list a handful. US equity futures are also in the red - the NQ (-2.5%) lags vs the RTY (-2.0%), ES (-2.0%) and YM (-2.0%). It is a headline-driven market, and geopolitics will likely dictate price action across markets, whilst in terms of scheduled events, the US IJC and US GDP 2nd reading will be followed by Fed hawks Bostic and Mester, whilst Daly will round off the Fed-speak around the US cash close.

24 Feb 2022 - 09:43- EquitiesEconomic Commentary- Source: Newsquawk