FTSE 100 sank on Monday as Russia-Ukraine tensions following comments from US officials over the weekend and reports Russia had increased the number of troops on the Ukrainian border.
The FTSE 100 was down 1.9% and the French CAC plummeted 3.4%. The German Dax crashed over 3.1%.
“The prospect of war is rarely good for stock markets, and so the new trading week has begun on a bad note across Europe and Asia as investors fear the alarm clock is about to sound on a physical battle between Russia and Ukraine,” said Danni Hewson, financial analyst at AJ Bell.
“Should Russia go to war with Ukraine, there is no telling how long the battle will last, and the damage wrought on the stock market.”
Evraz was the FTSE 100’s biggest faller slumping over 30% to 302p on Monday morning. Evraz has substantial operations in Russia and any sanctions imposed by the West as a result of Russia invading Ukraine could cripple their business.
IAG gave up 6% as investors departed travel shares on fears a war in Ukraine will lead to people cancelling holidays.
Asset managers were also heavily hit as they tracked global equity markets lower. Abrdn fell 4.8% while Schroders and St James’s Place were both 3.6% weaker.
The injection of uncertainty in markets saw gold rise which was enough to send Fresnillo higher by 4% which was the best performance of any stock listed in London.
Despite the FTSE 100 sinking on comments from US officials over the weekend and a warning from the UK’s Defence Minister for UK citizens to flee Ukraine, Russia maintains they will not invade Ukraine.
If there is no invasion in the short term we could see a rebound in markets. Analyst Danni Hewson highlights the benefits of patience through periods of volatility and panic in markets.
“Uncertainty is terrible for investors, and it will take real nerve to stay invested through war, particularly as news headlines are likely to cause panic on the markets. Yet patience has historically been rewarded as time in the markets is better than timing the markets.”