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Europe Markets

March 1, 2022, 11:42 a.m. EST

European stocks slump as Russian market closed for second day

By Steve Goldstein

European stocks declined on Tuesday with attention still trained on the isolation of Russia from global financial markets after its invasion of Ukraine.

The Stoxx Europe 600 (STOXX:XX:SXXP) , which ended just 0.1% lower on Monday despite heavier losses early in the day, skidded 2.4%.

Automaker Renault (PAR:FR:RNO) , German lender Commerzbank (ETR:XE:CBK) and Irish carrier Ryanair (DUB:IE:RYA) were among the companies seeing sharp declines.

The German DAX (XEX:DX:DAX) and the French CAC 40 (PAR:FR:PX1) each fell nearly 4%, while the U.K. FTSE 100 (FTSE:UK:UKX) lost 1.7%, as the index’s gearing to commodity producers helped limit damage.

While stocks struggled, bonds soared. The yield on Germany’s 10-year bund (XTUP:BX:TMBMKDE-10Y) turned negative for the first time in a month. The yield on the U.K. 10-year gilt (XTUP:BX:TMBMKGB-10Y) tumbled 26 basis points.

Heavy fighting continued in Ukraine, with the country’s second-largest city Kharkiv bombarded. Russia also said it was about to about making missile strikes on Kyiv, the capital. The Central Bank of Russia kept the local stock market closed for a second day after the U.S. barred transactions with it. The central bank on Monday lifted interest rates to 20% from 9.5%.

Rheinmetall (ETR:XE:RHM) rose for a second day, gaining 18%, after Germany said it would spend €100 billion to boost its armed forces. Thales (PAR:FR:HO) and BAE Systems (LON:UK:BA) also saw a second day of gains.

Oil companies including Aker BP (OSL:NO:AKRBP) and Equinor (OSL:NO:EQNR) surged as oil prices (NYM:CL.1) spiked.

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