Jittery stocks plunge with focus on Russia and Ukraine | Business Section

LONDON (Reuters) — U.S. equity futures and European stocks fell into the red on Monday as markets remained nervous that Russia could invade Ukraine despite attempts to defuse the crisis.

President Joe Biden and his Russian counterpart Vladimir Putin have agreed in principle to hold a summit on the Ukrainian crisis.

A summit would only take place if Russia did not invade Ukraine first, which Western countries have said it could do at any time despite repeated denials.

The Kremlin said there were no concrete plans in place for a summit, but a call or meeting could be called at any time.

“The Kremlin made it clear today that it was in no rush to hold a summit with Biden,” said Tim Ash, strategist at BlueBay Asset Management.

British Foreign Secretary Liz Truss said she was stepping up preparations with her allies for the worst-case scenario of the Ukraine crisis, adding that a Russian invasion was very likely.

In a reminder of the stakes, Reuters reported that Biden had prepared a sanctions package that includes banning U.S. financial institutions from processing transactions for major Russian banks.

S&P 500 stock futures fell 0.25%, erasing some earlier gains. Nasdaq futures also reversed course, falling 0.6%.

U.S. markets were on vacation Monday, but futures were still trading. Holiday trading can add to market volatility, said Giles Coghlan, chief currency analyst at HYCM.

The Russian ruble fell 1.5% to its lowest level in almost four weeks and Russian stocks hit their lowest level in 14 months.

European stocks also fell, falling 0.63%. UK stocks fell 0.1%.

The MSCI global equity index fell 0.2% to 2.5-week lows hit on Friday.

MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.5% to a six-day low and the Japanese Nikkei closed down 0.8%

The U.S. dollar index fell 0.2% to 95.837, well below the 1.5-year high of 97.441 hit last month. The euro strengthened 0.2% to $1.1343.

Eurozone recovery

German 10-year government bonds stabilized at 0.2%.

The euro zone’s economic recovery rebounded strongly this month as an easing of coronavirus restrictions gave the bloc’s dominant services industry a boost, according to the Flash Composite Managers’ Index. purchases from IHS Markit.

The data also hinted at stronger price pressures, analysts at Oxford Economics said, adding that the data was “likely to reinforce the ECB’s (European Central Bank) recent hawkish turn.”

Markets are also expecting aggressive tightening from the US Federal Reserve as inflation runs rampant. The Fed’s preferred measure of core inflation is due out later this week and is expected to show an annual rise of 5.1% – the fastest pace since the early 1980s.

At least six Fed officials are expected to speak this week and markets will be hypersensitive to their views on a possible 50 basis point hike in March.

Recent commentary has leaned against such a drastic measure and futures have reduced the likelihood of a half-point upside to around 20%, from well above 50% a week ago.

In oil markets, Brent crude gained 53 cents to $94.06, while U.S. crude rose 45 cents to $91.52.

Oil suffered its first weekly loss in two months last week, sending it off seven-year highs, amid signs of progress on a deal with Iran that could release new supplies to the market.

Iranian Foreign Ministry spokesman Saeed Khatibzadeh said on Monday that “significant progress” had been made in talks to revive the 2015 Iran nuclear deal after a senior European Union official warned. said Friday that a deal was “very, very close.”

Gold benefited from its status as one of the oldest safe havens, climbing to nine-month highs at $1,908 an ounce, before falling back to $1,894 an ounce.