Closing summary
Russia’s invasion of Ukraine in the early hours of this morning was met with disbelief and shock around the world, and caused turmoil in financial markets.
If wholesale gas prices stay at the current high level, UK annual household bills could rise to £3,000 in October, said Investec analyst Martin Young. They will go up by 54% to just under £2,000 next month under the regulator’s price cap.
Global stock markets have tumbled, with the FTSE 100 index in London falling 3.8% to 7,207 while the Dax in Frankfurt lost nearly 4%, France’s CAC dropped 3.8% and the Italian borsa dropped 4.1%. On Wall Street, the Nasdaq pared earlier losses and is now flat while the S&P 500 is down 0.9% and the Dow Jones has fallen 2%.
Brent crude, the global oil benchmark, went above $105 a barrel for the first time since August 2014. It is now at $103.86 a barrel, up more than 7%m while US light crude is trading 5.3% higher at $97.32 a barrel.
British gas for next-day delivery has jumped 45% to 310p per therm.
European wheat futures jumped 20% to a record price of €344 a tonne, the biggest rise in nine years. Ukraine is the fifth-largest exporter of wheat in the world and considered the bread basket of Europe. This threatens to push already-high food prices even higher.
Gold and other precious metal prices including palladium and platinum, have risen. Spot gold gained more than 3% at one stage to $1,969 an ounce, and is now trading at $1,923 an ounce. Aluminium rose over 5% to hit a record high of $3,466 a tonne in London.
Palladium, mostly used in catalytic converters for cars, was trading more than 5% higher this afternoon after touching $2,695.57 an ounce in the morning, up 7% to the highest level since August. Russia’s Norilsk Nickel, or Nornickel, is the world’s largest supplier of palladium and a major supplier of platinum.
Russia’s rouble hit a record low of 89.60 to the dollar and later traded 7.2% lower at 86.9. It had recovered more after the Bank of Russia said it would intervene to shore up the currency, before falling back again.
Russian stocks plummeted as much as 50% when trading resumed on the Moscow stock exchange. The dollar-denominated RTS index tanked 49.93% in early trading, and later traded 39% lower. The rouble-denominated Moex index fell 45% to 1,690.13, and was later down 33%.
London-listed Russian companies suffered heavy share price falls, with Sberbank plummeting 72% and Gazprom losing 30%. The biggest fallers on the FTSE 100 were the Russian mining companies Polymetal, down nearly 38%, and Evraz, down 30.3%.
As Russian government debt sold off, yields on benchmark 10-year OFZ rouble bonds (which move inversely to prices), rose to 10.93%, the highest since early 2016.
Thank you for reading. We’ll be back tomorrow. Bye! - JK
Updated
The G-7 foreign ministers have published a communiqué on Ukraine-Russia, which ends with these comments:
We are also closely monitoring global oil and gas market conditions, including in the context of Russia’s further military aggression against Ukraine. We support consistent and constructive engagement and coordination among major energy producers and consumers toward our collective interest in the stability of global energy supplies, and stand ready to act as needed to address potential disruptions.
FULL STAMENT: The G7 communiqué on Ukraine-Russia (note at the end comments about oil and gas markets) | #UkraineWar #Ukraine #OOTT pic.twitter.com/yzruXbe1EO
— Javier Blas (@JavierBlas) February 24, 2022
"We the Leaders of the #G7 are appalled by and condemn the large-scale military aggression by the Russian Federation against the territorial integrity, sovereignty and independence of #Ukraine"
— German Embassy (@GermanyinUSA) February 24, 2022
Full statement of G7 Foreign Ministers, including 🇩🇪🇺🇸: https://t.co/50EOJidTxJ
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