Home ›› 09 Mar 2022 ›› Stock
World stocks held at a one-year low on Tuesday, while gold climbed above the key $2,000 level, as the prospect of a ban on Russian oil imports pushed up oil prices and raised concerns of soaring inflation and slowing economic growth.
President Joe Biden's administration is willing to move ahead with a US ban on Russian oil imports even if European allies do not, US sources indicated, while Russia warned that prices could surge to $300 a barrel and it might close the main gas pipeline to Germany if the West halts oil imports over the invasion of Ukraine.
International oil benchmark Brent crude, which briefly hit more than $139 a barrel in the previous session, was up about 2.6 per cent at $126.42.
Still, with Europe rejecting plans to ban energy imports, there was some relief and European stocks picked up more than 1 per cent in early trading, although some analysts said that may be a temporary reprieve.
Since mid-February, European banks have lost a quarter of their share value and an earnings hit looks inevitable.
After the S&P 500's worst day since October 2020, Wall Street futures pointed to more losses.
"The price action appears to reflect building concerns over a sharper slowdown/recession for the global economy on the back of the energy price shock," Mizuho strategists said in a note.
The MSCI world equity index, which tracks shares in 50 countries, was down 0.2 per cent and has lost 10 per cent since early February. It was down as much as 0.5 per cent in early Asian trading, hitting its lowest level since March 2021.
An Asian stock market gauge lost 1 per cent in afternoon trade, tracking a bruising Wall Street session with Japan and Hong Kong leading losses.
"Clearly oil is in the firing line now from both sides. And there's a little bit of brinkmanship as to who can threaten whom when it comes to oil imports or exports," said Kyle Rodda, a market analyst at IG Australia.
Price action in the currency markets reflected increased investor nervousness with the US dollar advancing against the Aussie, signalling traders were becoming increasingly pessimistic about the global growth outlook. A currency market volatility gauge jumped to a two-year high.
US crude ticked up 1.8 per cent at $121.55 a barrel, while prices of many other commodities, including nickel, continued to rise as industrial buyers and traders scramble as the Russian-Ukraine conflict shows no sign of cooling.
