Stock markets in the red
Europe fell across the board: Paris (-3.97%), Frankfurt (-3.80%), Milan (-4.02%) and London (-2.63%).
The Nordic stock exchanges also fell: Stockholm -3.86%, Copenhagen -3.45%, Helsinki -4.37% and Oslo -3.45%.
In New York, the stock market lost ground at the start of the morning: the NASDAQ index, which is dominated by technology, fell by 4.55%, while the S&P 500 entered a correction zone.
“The increased geopolitical risk is adding to investor anxiety and weighing on risk assets,” said Craig Erlam, an analyst at Oanda.
“The week could be decisive for the markets, with the US Federal Reserve meeting on Wednesday, big technology results and continued tensions on the Ukraine-Russia border,” he continued.
The Atlantic alliance has said it is placing forces on standby and sending ships and fighter jets to bolster its defences in Eastern Europe amid fears of a Russian invasion of Ukraine.
Financial authorities have come to the rescue of the financial markets, with the Russian Central Bank announcing the suspension of foreign currency purchases, after a sharp fall in the country’s stock market indices and the rouble.
The FED is ready to raise interest rates to combat soaring prices and will decide at its meeting on Tuesday and Wednesday on the pace and extent of the move.
Investors tend to opt for safe-havens, including government bonds. As a result, yields, which move in the opposite direction to prices, fell in unison on the debt market.
Technology stocks, which are sensitive to interest rates, were struggling on the eve of quarterly reports from big names in the sector such as IBM, Apple and Microsoft.
The London Stock Exchange was particularly affected by the airline sector as the government announced on Monday that airlines would have to use 70% of their take-off and landing slots in the UK from the summer onwards to avoid losing them, compared with 50% today.
Similarly in Germany, Lufthansa fell 5.05% to 6.56 euros after Italian newspaper Il Foglio reported that it would take a 40% stake in Italy’s national airline ITA Airways.