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Highlights
- Analysts say oil prices may average US$110 in the second quarter of 2022.
- The global crypto market cap fell sharply on Thursday morning.
- Gold prices rose to over US$1900, the highest jump since September 2020.
The Russia-Ukraine conflict is proving a reality-check for the financial market. It could be the worst emergency for the market since the global financial crisis of 2008.
Investors are scurrying for shelter in safe-haven assets like slow-moving gold and value stocks to counterbalance the losses from high-growth shares. The energy-sector stocks will be worth keeping an eye on as Russia is one of the world's major global oil and gas suppliers.
Oil supply disruptions can have a cascading effect across the downstream industries. Besides, both Russia and Ukraine are major global suppliers of metals and food staples. So, the impact might be felt across sectors, from aluminum, industrial, machinery to food.
Let's look at how an all-out war may affect the different asset classes.
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Oil and Gas
Oil prices jumped to more than US$102 per barrel in intraday trading on Thursday, the biggest increase since 2014. The OPEC+ countries plan to supply an additional 400,000 barrels per day. Iran also intends to start delivering oil, which will ease pressure on the global market.
On the other hand, the US is considering tapping its emergency reserves to mitigate price rises.
Earlier, Wall Street analysts predicted oil prices might average US$110 in the second quarter before declining to average at US$90 by the year-end.
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Cryptos
The global crypto market fell 6.77% to US$1.62 trillion at 1:19 pm ET, slightly making up the heavy losses witnessed in the morning.
Bitcoin lost nearly 9% in the morning. But stablecoins held the fort with modest gains, mainly because they are pegged to traditional currencies. The stablecoin market was up 0.3% to US$182.5 billion on Thursday, according to coinmarketcap.com.
The crypto market remained highly volatile over the past few weeks.
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Metals
Gold prices rose to more than US$1900 on Thursday, the highest jump since September 2020. The yellow metals are considered "safe haven" assets because of their relative price stability over other assets. Metals like palladium and aluminum also increased due to Ukraine worries.
Bottomline
Global markets have withdrawn sharply because of the Russia-Ukraine conflict. Prices of oil and gas and commodities like aluminum may further increase and potentially impact global growth. However, investors should carefully evaluate the market before investing in any asset class.
Developments In The Market- Is It Going To Crash?
