European stocks flat as Russia-Ukraine tensions keep investors on edge

Oil prices spike on fears of a supply disruption

European shares closed Tuesday’s session unchanged as gains in auto and travel shares were offset by geopolitical risks, with some western countries imposing sanctions on Russia after it ordered troops into two breakaway regions of eastern Ukraine.

The pan-European Stoxx 600 index was flat, with automakers, travel stocks and technology shares the top gaining sub-indexes, while retailers and financial stocks were among the biggest losers.

Germany put a new Russian gas pipeline on ice and Britain hit Russian banks with sanctions as the West responded to Moscow's recognition of two separatist regions in Ukraine and a speech by president Vladimir Putin suggesting more belligerent aims.


The Iseq index dipped 0.3 per cent to 8,035.91, with banking stocks out of sorts as the sector, which has benefited in recent times from mounting speculation of central bank rate increases, saw money market expectations of a European Central Bank rate hike drift out in recent days by a month, to July.


Bank of Ireland lost 1.8 per cent to €6.08, while AIB declined 1.6 per cent to €2.52 and Permanent TSB fell 4.8 per cent to €1.60.

Still, housing shares were in demand, with Cairn Homes up 3.5 per cent at €1.23, while Glenveagh Properties rose 0.8 per cent to €1.2.

Tullow Oil jumped 4.84 per cent to 65c, as oil prices spiked at levels last seen in 2014 as commodity traders monitored headlines from Ukraine and Russia.


London’s Ftse 100 stock index closed higher, recouping earlier losses as strong results from medical products maker Smith+Nephew and gains in industrial stocks countered concerns relating to the Russia-Ukraine crisis.

Smith+Nephew surged 7.5 per cent and was the top boost on the index after naming Siemens Healthineers' Deepak Nath its new chief executive, while Holiday Inn owner IHG gained 4.2 per cent as its annual profit beat estimates.

Oil major BP, the largest foreign investor in Russia, fell 0.5 per cent after Germany halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany.

Shell gained 0.5 per cent as oil prices rallied on fears of a supply disruption as Europe's eastern flank stood on the brink of war.

Retail stockbroker Hargreaves Lansdown fell 15.6 per cent after reporting a drop in half-year profit, hurt by lower interest rates and easing market volatility.


Germany’s Dax fell the most among major European indexes, as it is seen as more vulnerable due to the country’s heavy reliance on Russian gas supplies.

Euro zone banks fell 0.7 per cent as investors scaled back their expectations for an ECB rate rise in 2022, pricing in a roughly 95 per cent chance of a 0.1 percentage point hike in July and of 0.4 points in hikes by the year-end.

Volkswagen surged 7.8 per cent and Porsche rallied 11.3 per cent following news Volkswagen was preparing an initial public offering of Porsche.


Wall Street’s main indexes were in negative territory in early afternoon trading as the prospect of harsh western sanctions against Russia over its invasion of Ukraine kept investors on edge, while a drop in Home Depot’s stock also weighed.

Home Depot slid after the home improvement chain reported a decline in gross profit margins for the holiday quarter due to a jump in transportation and labour costs. Its stock was the biggest drag on the Dow.

Shares of most big banks rose. US business activity regained speed in February, data from IHS Markit showed, but higher prices for inputs remained a burden. Another set showed that American consumer confidence fell for a second straight month in February.

Macy's shares were flat after the retailer topped expectations for comparable sales in the crucial holiday quarter.

Digital World Acquisition, the blank-cheque company behind former US president Donald Trump's new social media venture Truth Social, gained as the app climbed the charts after its debut on Apple's App Store.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times