The European markets briefly hit a three-month low due to heightened tensions in the Ukraine-Russia war. Investors shifted towards safe-haven assets, while oil prices surged on fears of potential supply disruptions. European stock markets hit a three-month low on Tuesday, driven by a broad-based selloff following Ukraine's unprecedented strike on a Russian military base using US-made long-range missiles.
Russia's subsequent threat to lower the threshold for nuclear weapon use added to market jitters. The Euro-Pan Stoxx 600 index dropped 1% early in the session, hitting levels last seen on 8 August, before trimming losses to close 0.45% lower.
Leading indices mirrored this decline, with Germany’s DAX and France's CAC 40 both falling 0.67%, while Spain's IBEX 35 slipped 0.74%.
Energy markets reacted sharply to fears that Ukraine might target Russia's oil and gas infrastructure, potentially disrupting global supply. Brent and WTI crude oil prices both spiked 3%, while natural gas futures surged 3.8%, reaching a one-year high before paring some gains.
Michael McCarthy, Chief Market Strategist at Moomoo, predicted further volatility: "Think resolution is coming, but the situation is likely to deteriorate first. Oil and gas prices are likely vulnerable to spikes over the coming weeks." Geopolitical uncertainties spurred demand for safe-haven assets.
Gold futures on COMEX rose 0.63% on Tuesday, extending their rally into the Asian session and reaching $2,644 per ounce - a one-week.
