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In our Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.
Markets across Europe have suffered falls at the start of the new week as the growing tensions between Russia and Ukraine continue to spook investors.
The FTSE 100 opened 1.3% lower this morning whilst Germany’s DAX index dropped 2.75%, France’s CAC index by 2.7% and Italy’s FTSE MIB by 3.65%.
Travel stocks were hardest hit with budget airlines Wizz Air and easyJet down 8.8% and 3.9% respectively. It comes as some operators, such as KLM, suspend flights to and from Ukraine amidst the growing uncertainty.
More than a dozen countries have urged their citizens to leave Ukraine as fears grow of an imminent Russian invasion. Fuelled by the growing number of Russian military forces on Ukraine’s border, world leaders are calling for an open discussion to find a resolution to the stand off.
In the United States, inflation has hit its highest level in 40 years. The rise of 7.5% was more than forecasted estimates and the biggest annual gain since February 1982. Core prices, which exclude food and energy purchases, rose 6.0%, the most since August 1982.
Inflation worries were reflected in the University of Michigan’s preliminary gauge of consumer sentiment in February, on Friday morning. At 61.7, the index reading came in well below expectations of roughly 67 and hit its lowest level since October 2011. The survey’s chief researcher termed the drop “stunning” and pointed out that “nearly half of all consumers are expecting declines in their inflation-adjusted incomes during the year ahead.”
Meanwhile, the Japanese government has extended its quasi-state of emergency in Tokyo and 12 other prefectures by three weeks, owing to continued coronavirus infections. While Prime Minister Fumio Kishida said that the increase in new cases has been slowing, health experts say the latest wave has yet to peak. Amid some criticism that the government has been slow to roll out its COVID-19 booster program, Kishida has set a target of administering one million booster shots a day by the end of February.
