Global stocks edge lower as investors monitor talks in Russia's monthlong war with Ukraine, while oil jumps 4%

March 21, 2022

Global stocks edge lower as investors monitor talks in Russia's monthlong war with Ukraine, while oil jumps 4%

russia ukraine st — Riot police officers are seen deployed in the streets during a protest against Russian military action in Ukraine, in Saint Petersburg, Russia, on March 13, 2022.
AFP via Getty Images

Global stocks dipped Monday, with Russia-Ukraine talks stalled as the war enters its fifth week.
US intelligence reports that Putin is prepared to re-engage in nuclear threats are weighing on sentiment, an analyst said.
EU nations are considering a ban on Russian oil imports, sending Brent crude above $112 a barrel.

Global stocks slipped Monday as investors tracked a mixed bag of developments around Russia's monthlong war with Ukraine, a sign of fresh pessimism about the prospects for peace, while oil rallied as European countries discussed a Russian ban.

Futures on the Dow Jones were down 0.3%, or 100 points, as of 6:10 a.m. ET, while those on the S&P 500 dipped 0.1%, and the Nasdaq lost 0.3%, suggesting a lower start to trading later in the day.

The MSCI All Country World Index, which tracks stocks in several developed and emerging market nations, inched 0.04% lower Monday.

Russia's ultimatum for Ukrainian forces to lay down their arms and surrender the besieged city of Mariupol was rejected on Sunday.

"There can be no question of any surrender, laying down of arms," Ukraine's deputy prime minister, Iryna Vereshchuk, said. "We have already informed the Russian side about this."

One factor driving negative sentiment is US intelligence reports that Russia's President Vladimir Putin is prepared to re-engage in nuclear saber-rattling, according to Deutsche Bank strategist Jim Reid. In the early days of the conflict, Putin warned of "consequences" for whoever interfered, saying his country was one of the world's most powerful nuclear states.

US President Joe Biden is traveling to Poland on Friday to discuss a coordinated effort to support Ukraine and to impose "severe and unprecedented costs" on Russia for its invasion, the White House said at the weekend.

Biden will also speak to his counterparts in the UK, Germany, and Italy at 7 a.m. ET Monday. Last week, he warned China about the consequences it would face if it offers "material support" for Russia.

"China's support for Russia remained a key unknown, but following the call, both sides expressed aspirations for a peaceful resolution to the conflict, and for tensions to not escalate any further," Deutsche's Reid said.

Despite the ongoing discord, Turkey's foreign minister said Sunday both Russia and Ukraine have made progress on negotiations and are close to an agreement.

Ukraine President Volodymyr Zelenskyy called again for talks, saying Saturday, "This is the time to meet, to talk, time for renewing territorial integrity and fairness for Ukraine."

The intensifying Russia-Ukraine conflict and a hawkish Federal Reserve have again stoked concerns in the bond market, and the yield on the 10-year US Treasury climbed 4 basis points to about 2.19%.

After the US central bank raised its benchmark interest rate last week by 0.25 percentage points, Fed Chair Jerome Powell and Atlanta Fed President Raphael Bostic are due to speak on Monday.

Investors will watch later for a key performance gauge of private sector companies — the Purchasing Managers Index for March — which on Thursday will show the first impact of Russia's conflict with Ukraine on activity, especially in Europe.

London's FTSE 100 rose 0.5%, and the pan-European Euro Stoxx 600 and Frankfurt's DAX wavered around the flatline. UK consumer price inflation data for February is due Wednesday.

In Asia, China reported its first COVID-19 deaths since January 2021. Equities in the region traded mixed, with the Shanghai Composite up 0.08%. Tokyo's Nikkei gained 0.7%, while Hong Kong's Hang Seng fell 0.9%.

Brent crude rose to around $112 a barrel, as European Union nations consider joining the US in a Russian oil embargo.

"With the possibility that more than a million barrels of Russian oil a day will be snubbed, given that the Netherlands and Germany combined received around a quarter of Russia's crude and light oil exports, demand would shoot up for crude supplies from OPEC+ nations," Susannah Streeter, markets analyst at Hargreaves Lansdown, said.

An attack on a Saudi energy terminal by Iran-aligned Houthi forces at the weekend added to price pressures.

Brent crude futures gained 3.6% to $111.93 a barrel, and West Texas Intermediate added 4% to reach $107.35 a barrel.

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