The Moscow Stock Exchange was the most affected on Monday, February 21, but European markets are also worried.
Article written by
Posted
Reading time : 1 min.
We’ve been through worse but we feel the tension. Logically, the Moscow Stock Exchange was the most impacted with a drop of 12%. And there is no reason why this decline should not stop. Behind the Russian action on Ukraine, there are huge geopolitical issues around energy issues, especially with gas coming from Eastern Europe to the West via Germany and the famous Northream 2 gas pipeline. Pending further events, international investors prefer to put their money in safety because no one knows how the conflict will evolve.
Ninety rubles for one euro and seventy-nine against the dollar, practically half of its traditional value. Here again, nothing could be more logical: operators are abandoning the currency of a country whose confidence is undermined. They are selling rubles to buy dollars and euros which are more reassuring – and secure – in the current state of affairs.
Between really worried traders and those taking advantage of the opportunity to take profits in markets that are very high, the question is how far the markets will react to the noise of boots. Markets increasingly oriented towards other concerns, first and foremost technological upheavals, particularly at a time of energy transition.
According to the economist Christian Saint-Etienne, the stock markets consider that the economic change underway in the world, in particular after the Covid, takes precedence over the risks of war. Moreover, investors consider that the risks of war will accelerate public and private investments in all these technological changes. But this is a matter of the medium to long term and not of the legendary immediacy of the financial markets.