European markets were rocked on Thursday by the news Russia had launched a full scale invasion of Ukraine which was met by the promise of server sanctions by the West.
European equities opened sharply lower on Thursday in a broad risk off move in equities and commodities soared of supply disruption fears.
The FTSE 100 was trading down by 2.2% at 7,328 in early trade on Thursday. The German Dax plunged more than 3%.
While equities sank, energy prices jumped on concerns supply would face severe disruptions, and oil broke the $100 mark.
European TTF Natural Gas Futures jumped around 30% piling on pressure for households across the region who have already seen bills increase.
“Markets woke up in panic mode as investors reacted to the news overnight of Russia’s invasion of Ukraine. We have seen clients sell out of risky asset classes such as stocks and buy gold and the US dollar which are seen as safer investments at times of uncertainty. We have seen oil prices charge higher with Brent Oil trading above $100 for the first time since 2014. This will have further consequences to the cost of living and inflation in Europe,” said Walid Koudmani, chief market analyst at financial brokerage XTB.
European shares sink
European shares experienced sharp selling on Thursday with sectors linked to Russia the most heavily hit. The West has promised a server package of sanctions that will likely cause economic hardships for Russia businesses and individuals.
Shares in FTSE 100 Polymetal and Evraz crashed 31% and 29% respectively as investor fled companies that relied on Russia for their business operations. Polymetal and Evraz have substantial mining operations across Russia.
Travel shares were heavily hit over fears the conflict could put people off from booking or taking holidays. IAG shares gave up 4.6% and FTSE 250 easyJet sank 4.9%.
Although oil prices jumped to the highest levels in six years, oil companies also slipped with Shell giving up 1.5% and BP sinking by 3.8%.
BP is particularly exposed to any additional sanctions that would impact energy supply between Russia and Europe.
The FTSE 100 was trading off its worst levels of the session at the time of writing.