The image is illustrative.
Photo: Spencer Platt / Getty Images / AFP / SCANPIX / LETA
12:53, February 22, 2022
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Stock markets are falling on Tuesday as oil and safe-haven asset prices rise, fueling concerns over Russia’s military activity in eastern Ukraine.
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Investors are deterred by growing geopolitical tensions after Russian President Vladimir Putin decided on Monday to recognize the independence of Ukraine’s so-called People’s Republics in the Donetsk and Luhansk regions, despite warnings from the West that such a move could lead to new sanctions.
Putin instructed the Ministry of Defense on Monday night to ensure that the Russian armed forces “maintain peace” in the so-called Donbass People’s Republics.
In response, the European Union plans to adopt comprehensive sanctions on Tuesday. The United States is also preparing a package of sanctions.
Crude oil, whose price has already risen by 25% this year due to rising demand, continued to rise on Tuesday. For the first time since 2014, the price of Brent crude oil on the London Stock Exchange has approached the limit of USD 100 per barrel for the first time since 2014.
The rise in oil prices is also not dampened by hopes that an agreement will be reached with Iran to limit its nuclear program, which would mean that Iran resumes oil exports.
Russia’s MOEX index fell 8% on Tuesday shortly after trading, after falling 10% on Monday. The ruble has also depreciated.
Indices of the London, Paris and Frankfurt stock exchanges also declined in the morning trade.
Meanwhile, the price of gold as a safe haven has exceeded 1,900 US dollars per ounce, approaching the highest price during the year.
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