Month: February 2022

Russia’s Sberbank in Europe faces closure after savers demand money

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Russia's Sberbank in Europe faces closure after savers demand money© Reuters. FILE PHOTO: A Deutsche Bank logo in Frankfurt, Germany June 9, 2015. REUTERS/Ralph Orlowski/File Photo

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By Tom Sims and Alexandra Schwarz-Goerlich

FRANKFURT/VIENNA (Reuters) -The European arm of Sberbank, Russia’s biggest lender, faces failure, the European Central Bank (ECB) warned on Monday, after a run on its deposits sparked by the backlash from Russia’s invasion of Ukraine.

Western allies have taken unprecedented steps to isolate Russia’s economy and financial system, including sanctioning its central bank and excluding some of its lenders from the SWIFT messaging system, used for trillions’ of dollars of transactions.

Sberbank Europe and two other subsidiaries were set to fail, after “significant deposit outflows” linked to “geopolitical tensions”, according to the ECB. Austria’s Financial Market Authority imposed a moratorium on Sberbank Europe, which is based in the country.

Separately, Deutsche Boerse (DE:), the German stock exchange operator, said that it was suspending from trading a number of securities from Russian issuers with immediate effect. The list includes Sberbank and VTB Bank.

“We’ve triggered a run on this kind of bank,” said Hans-Peter Burghof, a professor at the University of Hohenheim.

Banks and their lawyers are scrambling to assess the impact of the wave of sanctions, which prompted Russia’s central bank to more than double its main interest rate on Monday and introduce some capital controls to try and stabilize the rouble.

British bank HSBC is beginning to wind down relations with a host of Russian banks including the second-largest, VTB, according to a memo seen by Reuters, as financial institutions start to implement restrictions on Russia.

Shares of leading banks sank with the European banking sector down 5.9%, steeper than a 2.4% fall for the Euro Stoxx index.

The market turmoil came as Russian invasion forces seized two small cities in southeastern Ukraine and the area around a nuclear power plant, as Moscow’s diplomatic and economic isolation deepened. Russia calls its actions in Ukraine a “special operation”.

The banks with significant operations in Russia were hit the hardest. Austria’s Raiffeisen Bank International fell 13.8% as it said it was working through the impact of sanctions.

“Our Russian subsidiary bank has a very strong liquidity position and is recording inflows,” RBI’s chief executive Johann Strobl said in a statement to Reuters.

Societe Generale (OTC:) lost 11%, and UniCredit was 11.8% lower.

Investors fear that European banks with heavy exposure to Russia and Ukraine will need to make hefty provisions for the drop of the valuation of their assets in the region.

Germany’s Deutsche Bank (DE:), which opened a new Moscow headquarters in December, was down 8.7%. It said it would implement sanctions.

The ECB’s warning extended to Sberbank subsidiaries in Croatia and Slovenia. Sberbank is majority owned by Russia.

The lender said in a statement that several of its subsidiaries saw “significant outflow of client deposits within a very short time” and that it was in close contact with regulators.

Sberbank’s branches in Slovenia were closed until Wednesday and services temporarily limited to card transactions with a withdrawal limit of 400 euros a day, the Slovenian central bank said on Monday.

The Croatian central bank said depositors at Sberbank, which has about a 2% share of the country’s banking market, would be allowed to withdraw just under 1000 euros a day.

Sberbank Europe said in November it had reached a deal to sell its subsidiaries in Croatia, Slovenia, Hungary, Serbia and Bosnia and Herzegovina to a group including Serbia’s AIK bank. Serbian regulators gave their consent on Monday, the only ones yet to do so.

Meanwhile, the Russian securities dropped by Deutsche Boerse also include Lukoil and Aeroflot.

Euroclear said is has closed its link to rival settlement house Clearstream Banking for settling trades in Russian securities in response to European Union financial sanctions.

Depository receipts of Russian companies and banks, other than VTB, were still trading on the London Stock Exchange, with Sberbank down 70%. The LSE declined to comment.

Ukraine calls for no-fly zone to stop Russian bombardment

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Ukraine calls for no-fly zone to stop Russian bombardment© Reuters. Ukrainian service members are seen after Russia launched a massive military operation against Ukraine, at a check point in the city of Zhytomyr, Ukraine February 27, 2022. REUTERS/Viacheslav Ratynskyi

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KYIV/MOSCOW (Reuters) -President Volodymyr Zelenskiy urged the West to consider a no-fly zone for Russian aircraft over Ukraine on Monday after Moscow bombarded the country’s second largest city, drawing new sanctions by the United States and its allies.

Russia faces increasing international isolation over its invasion of Ukraine, and hours of negotiations between the two sides on Monday failed to reach a breakthrough to halt the fighting.

Ukrainian officials said Russian attacks in Kharkiv, a city of 1.4 million people, had killed civilians, including children. In a video address, Zelenskiy said it was time to block Russian missiles, planes and helicopters from Ukraine’s airspace.

“Fair negotiations can occur when one side does not hit the other side with rocket artillery at the very moment of negotiations,” Zelenskiy said. He did not specify how and by whom a no-fly zone would be enforced.

The United States has ruled out sending troops to fight Russia and officials have voiced concern about further escalating tensions between the world’s two biggest nuclear powers.

“A no-fly zone would require implementation,” White House Press Secretary Jen Psaki told reporters.

Such a move would require “deploying U.S. military to enforce, which would be… potentially a direct conflict, and potentially a war with Russia, which is something we are not planning to be a part of.”

Western nations, united in condemnation of Russia’s assault, have hit Russia with sanctions, with targets including President Vladimir Putin and his confidants.

But Putin has shown no sign of reconsidering the invasion he unleashed on Russia’s neighbour last Thursday in an attempt to redraw Europe’s security map and pull Ukraine firmly into its orbit.

The Russian leader put Russia’s nuclear forces on high alert on Sunday, though a senior U.S. defence official said Washington had still not seen any “muscle movement” following Putin’s announcement.

Asked at the White House on Monday if Americans should worry about nuclear war, U.S. President Joe Biden said: “No.”

But in a sign of souring relations, the United States expelled 12 Russian diplomats at the United Nations, citing national security concerns. Russia described the move as “hostile.”

‘IT’S A CRIME’

The Russian invasion – the biggest assault on a European state since World War Two – has failed to achieve the decisive early gains that Putin would have hoped for.

Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

Kharkiv in Ukraine’s northeast has become a major battleground. Oleg Synegubov, Kharkiv’s regional administration chief, said Russian artillery had pounded residential districts even though no Ukrainian army positions or strategic infrastructure were there. At least 11 people were killed, he said.

“This is happening in the daytime, when people have gone out to the pharmacy, for groceries, or for drinking water. It’s a crime,” he said.

Kharkiv’s mayor, Igor Terekhov, said four people had died after emerging from a bomb shelter to collect water, and that a family with three children had burned to death in a car.

Earlier, Ukrainian Interior Ministry adviser Anton Herashchenko said Russian rocket strikes on Kharkiv had killed dozens. It was not possible to verify the casualty figures independently.

Moscow’s United Nations ambassador, speaking in New York, said the Russian army did not pose a threat to civilians.

Images from the U.S. satellite company Maxar showed a Russian military convoy stretching over 17 miles (27 km) and moving closer to the capital, Kyiv, which remains under Ukrainian government control.

On Kyiv’s streets, signboards normally used for traffic alerts showed the message: “Putin lost the war. The whole world is with Ukraine.”

Fighting also occurred around the port city of Mariupol, officials said, and Russian forces seized two small cities around a nuclear plant in southeast Ukraine, the Interfax news agency reported.

CEASEFIRE TALKS

Talks between the two sides were held on the border with strong Russian ally Belarus – a launch pad for invading Russian troops.

Ukraine had said it wanted to secure an immediate ceasefire and the withdrawal of Russian forces. The Kremlin declined to comment on its goals.

The meeting ended with officials heading back to capitals for further consultations before a second round of negotiations, Ukrainian presidential adviser Mykhailo Podolyak told reporters.

“The Russian side, unfortunately, still has a very biased view of the destructive processes it has launched,” Podolyak tweeted.

Russian delegation head Vladimir Medinsky told reporters: “The most important thing is that we agreed to continue negotiating.”

The Western-led response has been emphatic, with sanctions that effectively cut off Moscow’s financial institutions from Western markets.

The United States imposed new sanctions on Russia’s central bank and other sources of wealth on Monday, and many Western companies began to disentangle themselves from their Russian operations.

Over the weekend, some Russian banks were barred from the SWIFT international payments system.

The European Union placed new sanctions on Russian oligarchs and officials and some of its members urged the bloc to begin talks on Ukrainian accession. Zelenskiy signed a letter formally requesting EU membership, an emphatic statement of commitment to Western values.

Putin dismissed the West as an “empire of lies” and replied to the new sanctions with moves to shore up Russia’s crumbling rouble currency, which plunged 32% against the dollar before recouping about half of its losses.

Russia’s central bank cranked up its key interest rate to 20% from 9.5%. Authorities told export-focused companies to be ready to sell foreign currency.

WEAPON SUPPLIES

U.N. human rights chief Michelle Bachelet said at least 102 civilians in Ukraine had been killed since Thursday but the real figure could be “considerably higher.”

More than half a million people have fled to neighbouring countries, according to the U.N. refugee agency.

Partners in the U.S.-led NATO (North Atlantic Treaty Organization) defence alliance were providing Ukraine with air-defence missiles and anti-tank weapons, NATO chief Jens Stoltenberg said.

The Kremlin accused the EU of hostile behaviour, saying weapons supplies to Ukraine were destabilising and proved that Russia was right in its efforts to demilitarise its neighbour.

But there was support for Ukraine from unexpected quarters.

U.S. technology firm Microsoft (NASDAQ:) said it had provided threat intelligence and defensive suggestions to Ukrainian officials about attacks on a range of targets, and also advised the government about attempted cyberthefts of data.

And European soccer’s governing body, UEFA, scrapped sponsorship by the Russian state gas giant Gazprom (MCX:) reported to be worth 40 million euros ($45 million) a season, and UEFA and the global federation FIFA suspended all Russian teams until further notice.

($1 = 0.8925 euros)

Sanctions on Russia, Oil Jumps, Talks Begin – What’s Moving Markets

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EconomyFeb 28, 2022 06:31AM ET

Sanctions on Russia, Oil Jumps, Talks Begin - What's Moving Markets

By Geoffrey Smith 

Investing.com — Fresh Western sanctions trigger financial panic in Russia and sharp falls in equities worldwide. The dollar and gold rise. Vladimir Putin puts his nuclear forces on high alert after “unfriendly” moves, while Europe awakes from a 30-year slumber on defense policy. In the U.S., New York City lifts its mask mandate and Lucid Motors is set to report earnings. Here’s what you need to know in financial markets on Monday, 28th February.

1. Russian assets tumble after fresh sanctions

The Russian ruble tumbled after new western sanctions effectively of its central bank and shut selected Russian banks out of the global financial messaging network SWIFT. That move will stop almost all payments into and out of Russia, except those directly linked to payment for Russian energy exports.

News of the sanctions triggered mass runs on deposits at Russia’s banks, Around 30% of Russian retail deposits are held in foreign currency.

The Central Bank, which to 20% to defend the ruble, said that Russia’s stock exchanges would remain closed all day, but depositary receipts of Russian companies listed in Europe, fell sharply, as did Russia-themed ETFs. Governor Elvira Nabiullina will hold a press briefing at 8 AM ET (1300 GMT).

2. Putin puts nuke forces on high alert as EU steps up

In addition to the financial measures announced, the weekend also saw major shifts in European foreign policy, as the continent was jolted into a new assessment of political realities.

Germany announced its since the end of the Cold War and vowed to spend above the amount recommended for NATO members in the future. The European Union for the first time ever said it would ship lethal weaponry to another country and closed its airspace to Russian commercial aircraft.

On the battlefield, Ukrainian forces continued to frustrate Russian attempts to seize major cities across the country. Unverified reports and social media footage suggested that Russia had responded by launching missile barrages against cities such as Kharkiv to break their resistance.

On Sunday, Russian President Vladimir Putin had placed his country’s , describing the move as a response to ‘hostile’ actions by the West against Russia.

Despite this, Ukrainian and Russian diplomats are due on the Ukraine-Belarus border later.

3. U.S. stocks set to open sharply lower

U.S. stock markets are set to follow European markets lower when they open later, in a response to the political and military developments.

By 6:15 AM ET, were down 443 points, or 1.3%, while were down 1.5% and were down 1.4%.

HP (NYSE:), Lucid Motors (NASDAQ:) and Workday (NASDAQ:) are among companies reporting earnings later.

The situation was also reflected in a rush for haven assets. The rose strongly, while the yield on the U.S. Treasury fell six basis points to 1.92%. rose another 1.0% to trade back above $1,900 an ounce.

4. Oil and gas prices surge on new fears

Crude oil prices rose sharply, as did European , amid fears that the new sanctions could disrupt energy flows out of Russia, even though they were tailored to avoid doing so.

By 6:15 AM ET, futures were up 4.3% at $95.56 a barrel, while was up 4.4% at $96.29 a barrel. U.S. Natural gas futures rose 1.5% to $4.538 per thousand BTUs, in anticipation of heightened demand from Europe to cover shortfalls in supplies from Russia.

Over the weekend, oil giants BP (NYSE:) and Equinor (OL:) said they will start exiting their Russian holdings. envisages a hit of up to $25 billion from a fire sale of its 19.75% stake in Rosneft (OTC:), most of it, albeit in the form of non-cash charges.

5. NYC to lift mask mandate

In brighter news, New York City said it will lift its mandate on people to wear masks in restaurants and entertainment venues as of March 7, another landmark in the country’s emergence from the latest wave of the pandemic.

The nationwide 7-day case rate has now fallen to its lowest since last July.

It’s a different story in China, however, where Hong Kong continues to record unprecedented levels of both new infections and deaths. Figures for the Chinese mainland, which are harder to verify, also continue to show rising case incidences.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Dow Futures Fall 430 Pts; Russian Sanctions Prompt Growth Worries

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Stock MarketsFeb 28, 2022 06:50AM ET

Dow Futures Fall 430 Pts; Russian Sanctions Prompt Growth Worries© Reuters.

By Peter Nurse

Investing.com — U.S. stocks are seen opening sharply lower Monday, as investors digest the potential economic ramifications of the increased sanctions on Russia at the start of a week that includes the release of the key monthly employment report.

At 7 AM ET (1200 GMT), the contract was down 430 points, or 1.3%, traded 62 points, or 1.4%, lower and dropped 180 points, or 1.3%.

Global markets were roiled at the end of last week when Russian President Vladimir Putin authorized an invasion of Ukraine.

More volatility is likely Monday after the West announced plans to block some Russian banks from the as punishment for the continued bombardment of Ukraine.

Although the move isn’t intended to impact energy flows from the world’s second largest crude oil producer, the measures are still designed to isolate Russia and thus are likely to disrupt global trade and hurt Western interests as well as those in Moscow.

“Exclusions from SWIFT will lead to missed payments and giant overdrafts similar to the missed payments and giant overdrafts that we saw in March 2020,” analysts at Credit Suisse said, in a note.

Adding to the geopolitical tensions, Putin placed his country’s nuclear deterrence forces on high alert as the West adopted a more aggressive stance to the invasion.

The EU stated it would start sending lethal weapons to Ukraine to help it defend itself, while Germany announced its biggest increase in defense spending since the end of the Cold War and vowed to spend above the amount recommended for NATO members in the future.

This has overshadowed the news that representatives of both Ukraine and Russia have agreed to meet on the Ukraine-Belarus border to discuss the situation “with no preconditions.”

Away from eastern Europe, Fed Chair Jerome Powell is set to testify before the House Committee on Financial Services on Wednesday, and again before the Senate Banking Committee on Thursday.

This comes ahead of Friday’s report for February, which is expected to show that the economy added a healthy 450,000 jobs in the month.

The Federal Reserve is widely expected to start a tightening process in a couple of weeks, potentially with a hike of 50 basis points, but investors will closely follow Powell’s testimony to see whether the uncertainty caused by Russia’s actions will stay the central bank’s hand.

Oil prices soared amid fears the additional sanctions will disrupt oil shipments from Russia, the world’s second largest crude producer and the largest supplier of to Europe.

Global output is already struggling to meet the rebound in consumption fueled by the reopening of economies after the pandemic, and any disruptions to Russian flows will only exacerbate this.

The Organization of the Petroleum Exporting Countries and allies including Russia, a group called OPEC+, is set to meet later this week to discuss further production levels.

By 7 AM ET, futures traded 4.8% higher at $96.01 a barrel, while the contract rose 5.6% to $98.68.

Additionally, rose 1.2% to $1,909.35/oz, while traded 0.7% lower at 1.1192.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Rouble steadies vs dollar in Moscow, hits record low outside Russia

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Forex32 minutes ago (Feb 28, 2022 08:02AM ET)

Rouble steadies vs dollar in Moscow, hits record low outside Russia© Reuters. FILE PHOTO: A vendor counts Russian rouble banknotes at a market in Omsk, Russia February 18, 2022. REUTERS/Alexey Malgavko

(Reuters) -The Russian rouble tumbled to a record low in extremely volatile trade on Monday, losing a third of its value so far this year, but central bank foreign currency intervention and an emergency rate hike helped its trim losses.

Russian markets took a hit after Western countries stepped up sanctions in retaliation for Russia’s invasion of Ukraine, the biggest assault on a European state since World War Two. In response, President Vladimir Putin ordered his military command to put nuclear-armed forces on high alert on Sunday.

At 1240 GMT the rouble was trading at 98 to the U.S. dollar, down 18% from Friday’s close, and at 100.10 per euro, 7.6% lower, with central bank selling of foreign currency set to limit its losses in Moscow trade.

It had earlier touched a record low of 120 to the dollar on electronic currency trading platform EBS.

The rouble pared losses after the central bank raised its key interest rate to 20%, having started intervening in FX markets on Feb. 24, when Russia began its invasion of Ukraine.

Moscow calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

“The rate hike to 20% can very substantially limit the ability to open positions against the rouble… But new shocks from the geopolitical sphere and sanctions can lead to unpredictable spikes in supply and demand that can disrupt the balance,” said Maxim Biryukov, senior analyst at Alfa Capital.

Stocks trading on the Moscow Exchange was closed.

STATE SUPPORT VS SANCTIONS

Russia’s central bank announced a slew of measures on Sunday to support domestic markets as it scrambled to manage the fallout of the sanctions that will block some Russian banks from the SWIFT international payments system.

The central bank said it would resume buying gold on the domestic market, launch a repurchase auction with no limits and ease restrictions on banks’ open foreign currency positions.

Analysts at Rabobank had warned before the Moscow Exchange opened that the sanctions on currency reserves removed what little support the rouble had.

“Even the gold is not liquid if nobody can use FX in exchange for it. There will be a complete collapse in the rouble today,” they wrote.

Ray Attrill, head of FX strategy at National Australia Bank (OTC:), said in a note on Sunday, “a collapse in the rouble appears inevitable on Monday morning”, and there was an increased risk of a Russian debt default as a result of the weekend developments.

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Euro, rouble trim earlier losses as Russia begins talks with Ukraine

Euro, rouble trim earlier losses as Russia begins talks with Ukraine By Reuters – Feb 28, 2022 22

By Joice Alves LONDON (Reuters) – The euro pared some of its earlier losses on Monday, mirroring the rouble, which also trimmed some of its declines from an all-time low, after…

Dollar Soars; Sanctions Escalation Prompts Safe Haven Demand

Dollar Soars; Sanctions Escalation Prompts Safe Haven Demand By Investing.com – Feb 28, 2022

By Peter Nurse Investing.com – The U.S. dollar soared in early European trade Monday, while the ruble plummeted to a record low, as enhanced sanctions by the West on Russia for its…

From euro to EM: Russia's Ukraine war upends market bets

From euro to EM: Russia’s Ukraine war upends market bets By Reuters – Feb 28, 2022

By Saikat Chatterjee and Dhara Ranasinghe LONDON (Reuters) -Russia’s invasion of Ukraine has upended several popular trades, inflicting heavy losses on investors bullish on…

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

BP, AerCap Fall Premarket; Renewable Energy, First Horizon Rise

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Stock Markets4 hours ago (Feb 28, 2022 08:26AM ET)

BP, AerCap Fall Premarket; Renewable Energy, First Horizon Rise© Reuters.

By Peter Nurse

Investing.com — Stocks in focus in premarket trade on Monday, February 28th. Please refresh for updates.

  • BP (NYSE:) ADRs fell 7.9% after the its intention to exit from its stake of around 20% in Russia’s Rosneft (OTC:), a decision that it said could cost around $25 billion.

  • Renewable Energy (NASDAQ:) stock soared 38% after oil major Chevron (NYSE:), up 0.29%, announced plans to buy the in a deal valued at $3.15 billion.

  • L3Harris Technologies (NYSE:), Raytheon Technologies (NYSE:), Lockheed Martin (NYSE:), General Dynamics (NYSE:) and Northrop Grumman (NYSE:) stocks all jumped by at least 4%, with these boosted by the news that Germany plans to dramatically increase its military spending.

  • First Horizon (NYSE:) stock rose 32% after Canadian TD Bank announced plans to buy the U.S. lender in an all-cash deal valued at $13.4 billion to expand its footprint in the United States.

  • AerCap (NYSE:) stock fell 5.5% after the said it will halt leasing to Russia, a region which usually leases around 5% of its fleet.

  • ViaSat (NASDAQ:) stock will be in focus after the satellite communications firm said it was investigating a suspected cyberattack that caused a partial outage in its residential broadband services in Ukraine and other European countries.

  • Nielsen (NYSE:) stock rose 8.14% after the TV ratings firm reported stronger than expected quarterly earnings, issued an upbeat full-year forecast and announced a $1 billion share repurchase program.

  • Block (NYSE:) stock fell 1.6%, outperforming the wider market, after BMO Capital Markets upgraded its stance on the fintech company to “outperform” from “market perform,” seeing more than 30% upside.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Wall Street Opens Lower as Russia Rails Against Sanctions; Dow Down 400 Pts

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Stock Markets21 hours ago (Feb 28, 2022 10:17AM ET)

Wall Street Opens Lower as Russia Rails Against Sanctions; Dow Down 400 Pts© Reuters

By Geoffrey Smith 

Investing.com — U.S. stock markets opened lower on Monday as drastic new sanctions enacted by the West on Russia over the weekend drew a furious response and further threats of escalation from the Kremlin. 

By 9:40 AM ET (1440 GMT), the was down 392 points, or 1.2%, at 33,667 points. The was down 1.2% and the was down 1.0%.

Earlier Monday, the U.S. Treasury said it would impose sanctions on the Russian Central Bank – a measure which, in conjunction with others taken over the weekend in Europe – will freeze over half of Russia’s foreign reserves and severely limit its foreign trade. The Russian ruble fell over 20% against the dollar in response. President Vladimir Putin responded over the weekend by placing his strategic nuclear forces on high alert, while Russia’s invading forces intensified their attacks on Ukraine’s cities, striking residential areas with long-range missiles. 

Aviation stocks were among the worst hit: AerCap (NYSE:) stock fell 12.4% after it said it would halt leasing to Russia, a market that accounts for 5% of its revenue.

The escalation supported defense and energy stocks, with Lockheed Martin (NYSE:) stock rising 4.6% and Raytheon (NYSE:) stock rising 1.5%.  With oil prices surging again due to fears that supplies out of Russia – the world’s second-largest exporter – will be disrupted, Exxon Mobil (NYSE:) stock fell 0.8%, outperforming the broader market but still depressed by fears about its own exposure to Russia, where it operates the massive Sakhalin-1 oil field. 

Exxon’s rival Chevron (NYSE:) fared better, supported by news of a $3.15 billion acquisition of Renewable Energy Group (NASDAQ:), whose stock rose 38%. By contrast, BP ADRs (NYSE:) fell 6.9% after it said it would exit its near-20% stake in Russian oil giant Rosneft immediately. The holding has generated a large part of BP’s cash flow for the last seven years. 

There was also M&A news in the financial sector, where Toronto Dominion (TSX:) said it will buy First Horizon National (NYSE:) for $13.4 billion, a 37% premium to Friday’s close. The deal will make TD, which already has a sizeable presence in the U.S. through its Ameritrade unit, into the country’s sixth-biggest lender, according to some estimates.

Financials were nonetheless hit by concerns about their exposure – direct and indirect – to Russia, and by the renewed fall in bond yields that will depress their lending margins. Citigroup (NYSE:) stock lost 4.2%, while JPMorgan (NYSE:) stock fell 3.3% and Bank of America (NYSE:) stock fell 3.2%.

Despite the shock to financial markets out of eastern Europe, analysts still said U.S. equities were well supported by fundamentals. 

Fidelity analyst Naveen Malwal argued that the U.S. is likely not to get directly involved in the conflict, and that its economy “is still in a mid-cycle expansion” despite the headwind from higher energy prices. Malwal pointed to “strong consumer spending, a tight job market, and rising corporate profits.”

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

S&P 500 ends lower as West hits Russia with sanctions

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Stock Markets14 hours ago (Feb 28, 2022 08:06PM ET)

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S&P 500 ends lower as West hits Russia with sanctions© Reuters. Flags are seen outside the New York Stock Exchange (NYSE) in New York City, where markets roiled after Russia continues to attack Ukraine, in New York, U.S., February 24, 2022. REUTERS/Caitlin Ochs

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By Devik Jain and Noel Randewich

(Reuters) – The ended lower after a volatile session on Monday, with investors wrestling with uncertainty and bank stocks dropping following powerful Western sanctions against Russia as it continued its invasion of Ukraine.

Helping the Nasdaq close in positive territory after opening at a loss, electric car makers Tesla (NASDAQ:) and Rivian Automotive jumped 7.5% and 6.5%, respectively.

Citigroup (NYSE:) fell 4.5% and helped push the S&P 500 banks index down 2.35% as the slipped. The broader S&P 500 financial index dropped 1.5%.

Global stocks slumped, the Russian rouble tanked to record lows and safe-haven assets got a boost after Western allies imposed new sanctions that limited Moscow’s ability to deploy its $630 billion foreign reserves and cut off some of its banks from the SWIFT global payments system.

Russian artillery bombarded residential districts of Ukraine’s second-largest city, as Moscow’s invading forces met stiff resistance on a fifth day of conflict.

“The Russia-Ukraine invasion in itself is not likely going to be a long-term headwind for U.S. equities. But I think in the short term, it’s a massive contributor to the equity pullback,” said Sylvia Jablonski, chief investment officer at Defiance ETFs.

The S&P 500 energy sector rallied 2.6%, thanks to higher oil prices. [O/R]

Defense stocks Raytheon Technologies (NYSE:), Lockheed Martin Corp (NYSE:), General Dynamics Corp (NYSE:), Northrop Grumman (NYSE:) and L3Harris Technologies (NYSE:) gained between 2.8% and 8% following news that Germany would increase its military spending.

Cybersecurity stocks also rallied, with Palo Alto Networks (NASDAQ:), Fortinet (NASDAQ:), Zscaler (NASDAQ:) and CrowdStrike Holdings (NASDAQ:) all climbing more than 4%.

The fell 0.49% to end at 33,892.6 points, while the S&P 500 lost 0.24% to 4,373.94.

The climbed 0.41% to 13,751.40, ending higher for the third straight session.

Monday’s session was busy. Volume on U.S. exchanges was 14.5 billion shares, compared with the 12.2 billion average for the full session over the last 20 trading days.

The S&P 500 fell 3.15% in February, while the Nasdaq lost 3.43%. So far in 2022, the S&P 500 has lost over 8%, the index’s deepest two-month decline since March 2020.

The worsening geopolitical crisis has added to investors’ concerns about soaring inflation and the Federal Reserve’s rate-hike plans. The S&P 500 and the Nasdaq logged their biggest two-month declines since the pandemic-led crash in March 2020.

The CBOE volatility index, also known as Wall Street’s fear gauge, rose for a second straight session.

Delta Air Lines Inc (NYSE:) dropped 3.9% after Russia closed its airspace to airlines from 36 countries in response to Ukraine-related sanctions targeting its aviation sector.

First Horizon (NYSE:) Corp surged 29% after TD Bank Group offered to acquire the U.S. bank in an all-cash deal valued at $13.4 billion.

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners.

The S&P 500 posted 20 new 52-week highs and five new lows; the Nasdaq Composite recorded 45 new highs and 92 new lows.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Oil Jumps Over 4% as Russia Throttled With Sanctions over Ukraine

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Commodities3 hours ago (Feb 28, 2022 03:33PM ET)

Oil Jumps Over 4% as Russia Throttled With Sanctions over Ukraine© Reuters.

By Barani Krishnan

Investing.com — Oil prices jumped almost 5% Monday as a raft of new sanctions throttled Russia’s economy and exports, including its prized crude that’s valuable to both Moscow and the world, as the West stood steadfast in punishing President Vladimir Putin for his invasion of Ukraine.

By 3:30 PM ET (20:30 GMT), London-traded , the global benchmark for oil, was up $3.79, or 4%, at $97.71 a barrel for its May delivery contract. The intraday high was $100.25.

Earlier, U.S. crude’s West Texas Intermediate, or benchmark, settled up $4.13, or 4.5%, at $95.72 for its April delivery contract. WTI hit a session peak of $98.94.

The United States, Britain, Europe and Canada blocked the access of various Russian banks to the SWIFT global interbank payment system —  squeezing the billions of dollars the country trades a day in oil and other commodities — as Putin’s forces ravaged Ukraine for a fifth straight day. 

The West had taken pains initially not to target Moscow’s energy exports with sanctions due to its own reliance on Russians oil and gas. 

But over the weekend, that mindset clearly changed, with EU officials affirming on Monday their plan to wean the bloc from its dependence on Russian energy, while being prepared to suffer in the short-term from spiraling oil and gas costs due to that decision.

“The oil market will remain very volatile as the risk of losing access to Russian energy supplies grows,” said Ed Moya, analyst at online trading platform OANDA.  “The uncertainty over how the Ukraine war will unfold has too many risks that include nuclear threats, which means any oil price dips on any strategic release announcement will be short-lived.” 

On a wider industry front, Russia was paying a bigger price for its incursion of Ukraine.

British oil giant BP (NYSE:) said Sunday that it is “exiting” its $14 billion stake in Russian oil giant Rosneft.

Shell (LON:) said it will exit all its Russian operations, including a major liquefied plant.  Norway’s Equinor also plans to exit Russia. 

Global oil producer alliance OPEC+, meanwhile, is expected to stay with its gradual output increase strategy when it meets this week, ignoring calls from consuming nations for increased output.

But crude prices also have the potential to drop in the near-term depending on the outcome of Iran nuclear talks and the plan by the United States and its allies to release some 70 million barrels of crude from their oil reserves.

Iran said on Monday efforts to revive a 2015 nuclear deal could succeed if the United States took a political decision to meet Tehran’s remaining demands, as months of negotiations enter what one Iranian diplomat called a “now or never” stage. A successful outcome to the talks could pave the way for the legitimate return of Iranian oil to the market, after U.S. sanctions imposed since 2018.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

S&P 500 Ends Lower as Russia Continues Invasion Despite Sanctions

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Stock Markets18 hours ago (Feb 28, 2022 04:04PM ET)

S&P 500 Ends Lower as Russia Continues Invasion Despite Sanctions© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 closed lower Monday, as investors weighed up the impact of hard-hard-hitting sanctions on Russia over its ongoing invasion of Ukraine.

The fell 0.30%, the fell 0.5%,or 179 points, the was up 0.4%.

The sanctions included booting certain Russia banks from the global payment SWIFT, and freezing Russia central bank’s ability to tap its $640 billion of reserves abroad, which serves as a rainy day fund to protect its economy.

Talks between Russia and Ukraine to find a resolution to the conflict are expected to resume in the coming days as both sides pledged  “to keep the negotiations going,” following the first round of talks. 

But reports that Russia has stepped up its aggression in Kharkiv as it continues to move closer to the Ukrainian capital Kyiv stifled hopes for a successful outcome on talks.

Financials, mostly banks, led the market lower as investors weighed up the exposure of U.S. banks to Russia in the wake of tougher sanctions aimed at crippling Russia’s economy to deter Moscow to end its invasion of Ukraine.

Among the biggest decliners, Citigroup (NYSE:) fell more than 4% after warning of a $5.4 billion hit from exposure to Russian assets. JPMorgan Chase(NYSE:), meanwhile, suspended its emerging Europe fund and Russia fund, sending its shares more than 4% lower.

As well as the impact of sanctions on Russia, investor sentiment on banks was also hurt by falling U.S. Treasury yields, which trade inversely to prices, as investors fled to safety.

Falling Treasury yields, or rates, hurt the net interest margin of banks, the difference between the interest income generated by banks and the amount of interest paid out to depositors.

Energy was the sole sector in the green, as oil prices jumped 4% on fears of supply disruptions amid ongoing geopolitical tensions.  

BP (NYSE:), however fell 5% after announcing that it would sell its 19.75% stake in Russian oil company Rosneft at a loss of up to $25 billion. Rival Shell (LON:) also said it would exit all its Russia operations that could result in impairments of about $3 billion.

Defense stocks, which benefit during times of war, were up sharply, with Northrop Grumman (NYSE:) and Lockheed Martin (NYSE:) rising more than 5%.

In other news, electric vehicle stocks were in the ascendency on bets that soaring energy prices would hasten the adoption of EVs.  

Tesla (NASDAQ:) jumped 7% after Bernstein hiked its price target on the company to $450 from $300.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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