Europe: Shares fall as Ukraine worries deepen

[BENGALURU] European shares fell on Thursday (Mar 24), as the war in Ukraine entered its second month and Western countries bolstered Ukraine aid and expanded sanctions on Russia at a special Nato summit.

Western leaders meeting in Brussels agreed to strengthen forces in Eastern Europe, increase military aid to Ukraine and tighten their sanctions on Russia.

"The tone of the various meetings was uncompromising," said Michael Hewson, chief market analyst at CMC Markets UK.

The pan-European Stoxx 600 index fell 0.2 per cent by close after struggling for direction throughout the day.

Banks fell 0.7 per cent, while retail stocks were led lower by a 3.3 per cent drop in British clothing retailer Next after it trimmed its sales and profit forecast for 2022-23.

Nervousness was evident as investors scurried to sectors such as consumer staple stocks that are less impacted by economic crises.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

After declining for 2 months on concerns about inflation, monetary policy and the Ukraine war, the Stoxx 600's meagre gains so far in March are at risk going into the last week of the month.

Russian President Vladimir Putin said on Wednesday that Moscow would seek payment in roubles for gas sold to "unfriendly" countries, jolting gas prices in Europe and raising the risk of a supply squeeze.

"Putin's order may serve to lift energy prices, while also challenging central bank sanctions and impacting EU policy decisions," said strategists at UBS' Global Wealth Management team.

The Dutch European Central Bank Executive Board Member Frank Elderson said the ECB could still raise rates this year.

Among individual stocks, defence companies BAE Systems and Thales gained 1.9 per cent and 1.7 per cent respectively, while Rheinmetall jumped 8.9 per cent.

Daimler Truck rose 7.1 per cent after it said it expected little impact on its business in 2022 from the Covid-19 pandemic and Russia's invasion of Ukraine, and forecast revenue growth of at least 14 per cent.

Telecom Italia gained 8.4 per cent after Reuters reported that KKR remains interested in taking over the Italian telecoms group.

Luxury goods group Richemont fell 2.1 per cent after selling its entire 20 per cent stake in Swiss watchmaker Greubel Forsey.

Meanwhile, Russia stocks climbed 4.4 per cent as some trading resumed after a month-long hiatus. REUTERS