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Markets React Calmly to Crimea Vote Markets React Calmly to Crimea Vote
(35 minutes later)
PARIS — Global financial markets on Monday mostly shrugged off the anticipated Russian annexation of Crimea, as stocks, currencies and energy prices all traded calmly. PARIS — Global financial markets on Monday mostly shrugged off the anticipated Russian annexation of Crimea, as stocks, currencies and energy futures all traded calmly.
Almost 97 percent of voters in Crimea, a historically Russian-speaking area of Ukraine, on Sunday backed union with Russia, despite warnings from the United States and European Union that a referendum would lead to sanctions against top Russian officials, including those close to President Vladimir V. Putin.Almost 97 percent of voters in Crimea, a historically Russian-speaking area of Ukraine, on Sunday backed union with Russia, despite warnings from the United States and European Union that a referendum would lead to sanctions against top Russian officials, including those close to President Vladimir V. Putin.
The adoption of sanctions on “about 20 people” announced Monday by European Union foreign ministers “are already priced in by the markets,” Mujtaba Rahman, Europe director for Eurasia Group, wrote in a research note. “The market is now in a holding pattern, looking at whether we get further incursions by Russia into Ukraine proper. It’s all about Putin and his next chess move.”The adoption of sanctions on “about 20 people” announced Monday by European Union foreign ministers “are already priced in by the markets,” Mujtaba Rahman, Europe director for Eurasia Group, wrote in a research note. “The market is now in a holding pattern, looking at whether we get further incursions by Russia into Ukraine proper. It’s all about Putin and his next chess move.”
Investors are closely watching for signs that Russia’s oligarch class is moving to repatriate more of its billions in savings invested overseas. The calm market conditions Monday suggested that there was no fire sale taking place. In afternoon trading, the Euro Stoxx 50 index, a barometer of euro zone blue chips, had risen 1.2 percent, while the FTSE 100 index in London had gained 0.9 percent. As Wall Street opened, the Standard & Poor’s 500-stock index rose 0.81 percent, the Dow Jones industrial average added 0.87 percent and the Nasdaq composite index was up almost 1 percent.
In midday trading, the Euro Stoxx 50 index, a barometer of euro zone blue chips, had risen 0.8 percent, while the FTSE 100 index in London had gained 0.5 percent. Trading in Standard & Poor’s 500-stock index futures indicated stocks would rise modestly at the opening bell on Wall Street. Russia’s Micex index was up 2.5 percent, and the dollar was trading at 36.33 rubles, down 0.8 percent.
Russia’s Micex index was up 3.9 percent, and the dollar was trading at 36.56 rubles, barely changed, but near a record low for the ruble. Investors are closely watching for indications that Russia’s oligarch class is moving its billions of dollars in savings — money the country’s most wealthy have in recent years invested in things like trophy real estate in London, Paris and New York, as well as in financial assets in Western Europe and the United States. The calm market conditions on Monday suggested that there was no fire sale taking place.
Still, some investors said it appeared that the ruble was holding up relatively well only because of currency market intervention by the Bank of Russia, the central bank. The Bank of Russia did not immediately respond to requests for comment.
“Any news that suggests the conflict will escalate, with stronger sanctions from the U.S. and the E.U. could have a permanent effect on the ruble,” Ulrich Leuchtmann, head of foreign exchange research at Commerzbank in Frankfurt, said.
Mr. Leuchtmann said, “We’re seeing Russian-based investors trying to transfer assets out of Russia,” something that probably had contributed to the relative strength in developed-nation financial markets on Monday.
He said it was impossible to tell how much money had moved since the pace of capital flight from Russia picked up at the end of 2013, but that it was clear from talk in the market that the pace was picking up.
European energy markets were not overly concerned about the possibility of interruptions of natural gas flows from Russia to Europe. British natural gas prices were down about 1.5 percent on Monday.European energy markets were not overly concerned about the possibility of interruptions of natural gas flows from Russia to Europe. British natural gas prices were down about 1.5 percent on Monday.
Trevor Sikorski, an analyst at the London-based research firm Energy Aspects, said traders were reassured by the presence of large amounts of stored gas in Europe because of the warm winter. He also said that the outcome of Sunday’s Crimea vote “was expected and therefore does not change much the perception of the likelihood of a gas supply disruption.”Trevor Sikorski, an analyst at the London-based research firm Energy Aspects, said traders were reassured by the presence of large amounts of stored gas in Europe because of the warm winter. He also said that the outcome of Sunday’s Crimea vote “was expected and therefore does not change much the perception of the likelihood of a gas supply disruption.”
United States crude oil futures were trading at $98.68 a barrel, down 0.2 percent. United States crude oil futures were trading at $98.65 a barrel, down 0.2 percent.
The dollar gained slightly against most major currencies. The dollar gained 0.4 percent against the Japanese currency from its levels late Friday in New York, to 101.81 yen. The euro slipped 0.2 percent to $1.3890. The dollar gained slightly against most major currencies. The dollar gained 0.4 percent against the Japanese currency from its levels late Friday in New York, to 101.74 yen. The euro slipped 0.2 percent to $1.3942.
Asian shares were mixed, with the Tokyo benchmark Nikkei 225 stock average down 0.4 percent and the Shanghai composite index up nearly 1 percent. Asian shares were mixed, with the Tokyo benchmark Nikkei 225 stock average falling 0.4 percent and the Shanghai composite index gaining nearly 1 percent.
The bond market, often the first place where anxieties appear, was also calm, with the benchmark United States 10-year Treasury trading to yield 2.68 percent, little changed from last week. Comex gold futures were essentially unchanged. The bond market, often the first place where anxieties appear, was also calm, with the benchmark United States 10-year Treasury trading to yield 2.67 percent, little changed from last week. Comex gold futures were essentially unchanged.
Mr. Rahman of Eurasia group said investors would remain cautious as the drama in Ukraine unfolds. He said the referendum Sunday paved the way for Russia to “annex Crimea within a month.”Mr. Rahman of Eurasia group said investors would remain cautious as the drama in Ukraine unfolds. He said the referendum Sunday paved the way for Russia to “annex Crimea within a month.”
After incorporating Crimea, Mr. Rahman said, Mr. Putin will then seek to influence Ukraine by undermining the Kiev government’s authority in the eastern part of the country, though he said there remained about a 40 percent chance that Russia would invade Ukraine proper.After incorporating Crimea, Mr. Rahman said, Mr. Putin will then seek to influence Ukraine by undermining the Kiev government’s authority in the eastern part of the country, though he said there remained about a 40 percent chance that Russia would invade Ukraine proper.