Russian stocks plummeted and the Russian ruble hit a record low after Russia invaded Ukraine.
The MOEX Russia index plunged as much as 45% before rebounding to trade down 33%. Trading on the exchange was suspended for some time on Thursday in light of the freefall. The stocks hit the worst by the incursion were banks and energy companies.
Kyiv and other cities in Ukraine were awakened on Thursday morning to the sounds of gunfire and artillery fire as Russian forces, directed by strongman Vladimir Putin, finally launched an offensive after weeks of speculation. The conflict roiled global markets, but the most profound effects were felt by Moscow, which is now facing a bevy of international sanctions.
Sberbank, Russia’s largest bank, was down nearly 50%, while the second-largest, VTB, retreated more than 41%. Russian oil giant Rosneft was down as much as 58% at one point. The British multinational BP, which owns a nearly 20% stake in Rosneft, saw its stock value decline by almost 6%. Russian oil company Gazprom also saw precipitous declines.
OIL PRICES SOAR ABOVE $105 AS RUSSIA INVADES UKRAINE, HIGHEST SINCE 2014
The invasion is also rattling international markets, albeit not as aggressively as those in Moscow. The Dow Jones Industrial Average dropped more than 700 points upon opening on Thursday, a 2.13% decline. The S&P 500 retreated by 1.5%, and the Nasdaq was off by about 1%.
The price of oil climbed to its highest price since 2014 because of the military action, with international benchmark Brent crude surpassing $105 a barrel amid concerns about disruptions to the global energy supply.
U.S. West Texas Intermediate futures saw the biggest increase in eight years, skyrocketing by more than 8% to trade at $99.46.
Aluminum prices also leaped more than 3% to hit a record high of $3,450 per ton on the London Metal Exchange. Russia is also a large exporter of certain metals. Nickel was also at record levels.
“With base metals inventories already running extremely low, there is very little additional cushion for further supply disruptions — either from Russia directly or via higher-for-longer gas and power prices,” said JPMorgan in a note to clients.
The next big question facing the markets is what new tranches of sanctions from the United States and European countries will look like. After imposing new sanctions earlier this week, President Joe Biden is expected to announce another round on Thursday.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
“I condemned this unprovoked and unjustified attack by Russian military forces. I briefed him on the steps we are taking to rally international condemnation, including tonight at the United Nations Security Council,” Biden said of a phone call he had with Ukrainian President Volodymyr Zelensky.
“Tomorrow, I will be meeting with the leaders of the G-7, and the United States and our Allies and partners will be imposing severe sanctions on Russia. We will continue to provide support and assistance to Ukraine and the Ukrainian people,” Biden added in a Wednesday night statement.
