European stocks slumped to nine-month lows on Thursday, with banks and automakers bearing the brunt of the sell-off, after Russia launched an all-out invasion of Ukraine.
The pan-European Stoxx 600 index tumbled 3.3 per cent to its lowest since May 2021, marking a correction, or 10 per cent drop, from its record high in January.
Investors globally rushed to the relative safety of gold and government bonds and dumped equities following the biggest attack by one state against another in Europe since the second World War. US president Joe Biden and other Western leaders promised tough sanctions in response.
European banks most exposed to Russia, including Austria's Raiffeisen Bank, UniCredit and Société Générale, slumped between 12.2 per cent and 23 per cent, while the wider banking index fell 8.2 per cent, its worst day since the pandemic-fuelled sell-off of March 2020.
Shares in building materials giant CRH and Ryanair, both of which have large exposures to Ukraine, were among the main fallers on the Irish stock market on Thursday as global financial markets were thrown into turmoil. CRH ranks among the top cement producers in Ukraine, where its operations, employing about 800 people, generates as much as $300 million (€269 million) of annual sales. Its shares closed over 7 per cent down at €38.57.
Ryanair fell back 2.6 per cent as the carrier suspended flights to and from Ukraine for at least 14 days as the airspace was closed to civilian flights.
The Iseq overall index slid 4.6 per cent to 7,589, its lowest level in almost a year, with banking stocks also among the others to suffer. AIB and Bank of Ireland were down 4.6 per cent and 4.9 per cent respectively.
Most stocksended in the red.
Britain’s main stock indices tracked the sharp sell-off in global equities, as investors shed riskier assets after the Russian invasion. The benchmark FTSE 100 index sank 3.8 per cent by the close, while the domestically focussed mid-cap index fell 2.6 per cent.
Russia-exposed miners such as Polymetal, Evraz and Petropavlovsk plummeted between 27per cent and 37.8 per cent, while London-listed depository shares of Russian bank Sberbank Rossii PAO plunged 74.2 per cent.
Losses on the commodity-heavy FTSE 100 were smaller than its European peers.
Banks were the worst performers, down 7.4 per cent. Britain's largest high-street bank Lloyds fell 10.8 per cent after missing profit expectations.
Shares of BAE Systems rose 5.2 per cent after the defence company forecast another year of sales growth and margin expansion in 2022 and reported a 13 per cent increase in 2021 core earnings.
Major regional indices including France’s Cac 40 and Germany’s Dax each fell close to 4 per cent as investors feared the potential impact of severe western sanctions on Russia.
"The war, sanctions, and the likelihood of meaningful retaliation by Russia together will likely cause a material global recessionary shock," Eurasia Group analysts said.
Europe’s oil and gas index slipped 0.3 per cent, falling the least among sectors, as oil prices surged over 6 per cent, pushing Brent crude past $100 a barrel for the first time since 2014. The sector remains Europe’s top performer this year with a 7.6 per cent gain.
Meanwhile, renewable energy firms such as Orsted, Vestas Wind Systems and EDP Renovaveis surged over 10 per cent, as they were seen as benefiting from a shift to renewable energy as gas prices soar.
US stock indices dipped more than 1 per cent on Thursday, led by losses in bank stocks. On the benchmark S&P 500, all the 11 major sectors were in the red, with financial stocks falling 2.9 per cent.
Most big lenders, including Bank of America, Citigroup, Wells Fargo and Goldman Sachs slipped over 4 per cent. Tesla dropped 2.5 per cent to lead losses among the mega-cap growth names. Apple and Amazon. com fell over 2 per cent each. – Additional reporting by Reuters