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Highlights:
- Tensions rise between Russia and Ukraine amid fears that Moscow could initiate military action against the country.
- Global markets performed poorly as tensions between Russia and Ukraine increased.
- STOXX Europe 600, the stock index for European stocks, had declined 2.44 per cent at 8:30 AM EST and was at 462.82 points.
Global stock markets performed poorly on Monday, January 24, as the tension between Russia and Ukraine increased.
STOXX Europe 600, the stock index for European stocks, had declined 2.44 per cent at 8:30 AM EST and was at 462.82 points. Meanwhile, the indexes in Frankfurt, London, and Paris were down between one and two per cent.
In India, NIFTY 50, the benchmark Indian equities market index, was down 2.7 per cent and closed 17,149.10 points compared to 17,617.15 in the previous trading session.
What's happening between Russia and Ukraine?
Tensions are rising between Russia and Ukraine amid fears that Moscow could launch a full-fledged invasion. Published reports claim that the Russian troops are present in huge numbers near the two nations' borders.
Ukraine has claimed that Russia could try to destabilize the country through military invasions.
Russia has denied reports claiming it is planning to attack Ukraine. The conflict between both countries began in 1991 when the Cold War ended, and Ukraine became independent.
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In 2014, tensions between Russia and Ukraine resurfaced after Ukrainian President Viktor Yanukovych fled the country in February due to protests by the citizens for his alleged relations with Moscow.
In a controversial referendum in March 2014, residents of Ukraine's Crimea decided to join the Russian Federation. Since then, both the countries have been at loggerheads.
Bottom line
Historically, periods of uncertainty are worst for the equities market. Stocks suffer the most whenever there's uncertainty across the world due to a war-like situation or public health crisis.
When there was uncertainty during the initial breakout of the coronavirus pandemic, stock markets had taken a massive hit across the world.
Also Read: 2 stocks to rebalance your portfolio ahead of an interest rate hike
Similarly, as tensions rise between Russia and Ukraine, it is expected that the equities market will suffer until there's some clarity over the situation.
There is already uncertainty over interest rate hikes in Canada, leading to an overall poor performance since the past few trading sessions.
The added fears of a military invasion are likely to impact the Canadian markets negatively. On January 21, the S&P/TSX Composite Index was down 2.1 per cent.
Sectors like Energy, Financial and Information Technology sector were down 3.4 per cent, 1.2 per cent, and 3.34 per cent, respectively.
