Capex.com monitoring effect of Russo-Ukrainian conflictSubmitted by Tony Seifart
Market and Trade specialists at international multi-licensed fintech brokerage CAPEX.com are monitoring the effects of the global and local markets after Russia sent troops into Ukraine on Thursday.
President Putin of the Russian Federation gave the green light for troops to enter Ukrainian territory on what he has labelled a “special military operation”. The effects were immediately felt across all major markets.
The Moscow Stock Exchange (MOEX) delayed opening on Thursday to allow the Bank of Russia to pump liquidity into the market. This however did not prevent losses of 44% across the board and the Bank of Russia was forced to stop short-trading.
“European Markets (FTEU3) reacted predictably,” says Jack Edwards, Marketing Manager of CAPEX.com in South Africa. “Europe’s stock markets dropped by almost 4% at opening, while the New York Stock Exchange (NYSE) opened at 2.5% lower.”
“We see a lot of money moving into safe-havens like Gold, US Dollars, Swiss Francs and Japanese Yen,” he continues. “We saw gold rise 3.37% to $1970.24 per troy ounce by lunch time yesterday.
Of greatest concern is the international Oil price which broke the $100 mark to hit $105 per barrel in trade on Thursday. Russia is a major supplier of Oil to the world markets, as well as a large supplier of Natural Gas to Europe. On Wednesday, German Chancellor Olaf Scholz announced that Germany would halt the certification of Nord Stream 2, a 1200km pipeline linking Russia with Germany through the Baltic Sea.
“The Johannesburg Stock Exchange (JSE) lost some ground on Thursday with the main index dropping 2%. The Rand also faired badly, dropping 3% of its value against the US Dollar when trading opened to sit at R15.46/$,” continues Edwards. “While Finance Minister Enoch Godongwana may have given consumers a reprieve in his annual budget speech on Wednesday by leaving the fuel levy at last year’s rate, the drop in the strength of the Rand and the soaring Oil price might affect consumers over the short to medium term. This might lead to an increase in the petrol price and put further strain on South African consumers.”
For the moment, most traders are taking a wait-and-see approach, while the more cautious are pushing money into Gold to buffer against any further losses, according to market analysts.
Bitcoin was trading down 4.3% on Luno, South Africa’s most popular crypto exchange, having dropped to a low of R542 000 per coin before recovering to R570 000.
“We are taking a cautious approach to the markets,” adds Edwards. “All eyes will now be on the response of the United States and NATO on how they will handle the incursion into Ukraine. These responses will determine market reaction. We’re all holding our breath,” he says.
CAPEX.com is a leading global trading platform providing its users with expert insights, tools, and resources to make markets accessible to a worldwide audience and offering a tailor-made trading experience. Its professional trading platforms, robust technological infrastructure, and transparent trading conditions have propelled it as one of the most respectable brokers on the international stage.
This release compiled and distributed by JamJar Media.
JamJar MediaTony Seifart
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