After the surprise, the panic. Taken aback by the invasion of Ukraine by Russia, the financial markets gave in to panic on Thursday 24 February. The indices of most European stock markets fell by several points. On Friday morning, the indicators returned to green. But uncertainty remains high.
>> Follow the evolution of the Russian-Ukrainian conflict in our live
At the same time, commodity prices have exploded. These increases raise fears of fallout on energy costs in Western countries, with the fear of an inflation boom in the background.
CAC 40: a fall, followed by a rebound, and a lot of uncertainty
The main Paris stock market index, which brings together the prices of the 40 largest French multinationals, was struggling on Thursday evening. In 24 hours, the CAC 40 has lost nearly 4% of its value. A fall pushed among others by companies well established in Russia, notes Le Figaro. Thus, Renault, of which Russia is the first foreign market, lost 9%.
Friday, the CAC 40 is still back in the green. For John Plassard, investment specialist within the Mirabaud financial group, interviewed by Agence France-Presse, this rebound is explained by a “bargain hunting” and by the speech of US President Joe Biden, “considered moderate”. But the market environment remains highly uncertain, analysts warn.
Oil: the barrel of Brent has exceeded the symbolic bar of 100 dollars
Oil prices soared on Thursday. The barrel of Brent, also called “crude from the North Sea”, which serves as a reference in Europe, exceeded 105 dollars, a level which had not been reached since 2014, underlines Le Figaro. On Friday, however, prices started to fall again, falling back below the symbolic bar of 100 dollars.
Russia is an essential country for the energy supply in Europe and, beyond that, for the entire planet. It is the world’s second largest exporter of oil and the largest exporter of gas, the price of which also soared on Thursday. The price per megawatt hour of gas in Amsterdam, Europe’s benchmark market, ended at 135 euros, up more than 50% from the previous day. But again, this trend was reversed on Friday, with a megawatt hour down to around 95.50 euros during the day.
Cereals: fears over wheat and corn supplies
Another economic consequence of the war in Ukraine: the price of wheat reached an unprecedented level on Thursday evening. The price per tonne closed at 316.50 euros on Euronext, the main stock exchange in the euro zone. Russia and Ukraine are two breadbaskets for the planet. Moscow is the world’s largest wheat exporter and Ukraine is the fourth.
Market fears also focused on corn, half of European imports from Ukraine, reports Agence France-Presse. The price of this cereal jumped Thursday: up to 304 euros per tonne on Euronext, while it stood at 280 euros in the morning at the opening of the stock market.
On Friday, the trend nevertheless returned to a downward trend, with a price per tonne falling back below 300 euros at the end of the day for both wheat and corn.
This volatility in commodity prices poses the threat of further inflation in France. According to provisional data published by INSEE, consumer prices in February jumped 3.6% over one year, after rising 2.9% in January and 2.8% the two previous months. Thursday noon, President Emmanuel Macron warned the French that the events in Ukraine would have “lasting consequences on our lives”. And these consequences could first be felt in the wallets.