Global markets remain negative over nuclear concerns

By Murat Aslan

ISTANBUL (AA) - As Russian forces captured Ukraine's Zaporizhzhia nuclear power plant, the largest in Europe, global share markets saw an increase in selling pressure.

After reports of a fire at the nuclear power plant, Ukrainian President Volodymyr Zelenskyy said on Thursday if there is an explosion, it will be the end of Europe.

In the backdrop of these developments, rising commodity prices are causing uncertainties regarding inflation and monetary policies.

- Fed

On Thursday, US Federal Reserve (Fed) Chairman Jerome Powell stated that the final impact of the Russia-Ukraine war is uncertain, but it may affect spending and investment. He said Fed will increase interest rates this month.

Powell further said rising commodity and energy prices could put an upward pressure on inflation and decrease the risk appetite, leading to a decrease in investment and expenditures.

On the other hand, international credit rating agency Standard & Poor's (S&P) once again downgraded Russia's credit rating to CCC-.

Analysts have said the developments in Ukraine coupled with the figures of the US employment report have become the focus of investors.

The developments in commodity prices are also closely being monitored, the analysts said.

The barrel price of Brent oil, which reached the highest level since February 2013, of $118.4 on Thursday due to supply concerns, was stabilized at $110 on Friday.

While Powell's statements and inflation concerns increased the selling pressure in bond markets, this trend was reversed by geopolitical tensions and the US 10-year bond yield fell to 1.78% on Thursday.

The ounce price of gold, rose by 0.6% to $1,936 on Thursday, and $1,935 in Asian markets on Friday.

On Thursday, the S&P 500 index fell 0.53% in the New York stock market, the Dow Jones index fell 0.29% and the Nasdaq index lost 1.56%. Index futures contracts in the US continue their sales-weighted course on Friday.

- European stock market

European stock markets closed Thursday with a decrease of more than 2% due to the increasing selling pressure, but index contracts in futures started Friday with a decrease of 2%.

Sanction decisions against Russia continue to be announced.

German automaker Volkswagen announced that it will cease vehicle exports to Russia and its local production in the country.

However, German Economic Affairs and Climate Action Minister Robert Habeck said on Thursday that Germany is dependent on Russian natural gas and that oil, gas and hard coal imports from Russia should not be banned.

While it was announced that the Russian stock market will be closed for trading on Friday too, the Central Bank of Russia stated that the commission that individuals have to pay on the total purchase amount when buying foreign currency on the stock market has been reduced from 30% to 12%.

With these developments, the euro/dollar exchange rate is at 1.1030 on Friday after testing the lowest level since May 2020 with 1.1010 on Thursday.

On Thursday, the DAX index in Germany fell by 2.16%, the FTSE 100 index in the UK by 2.57%, the CAC 40 index in France by 1.84%, and the FTSE MIB 30 index in Italy by 2.35%.

- Asian markets

A sales-based trend was also observed in Asian stock markets on Friday.

News that China will announce its lowest growth target in recent years reduced the risk appetite in the stock markets.

Meanwhile, the unemployment rate in Japan rose to 2.8%.

On Thursday, Asian indices were also mostly on the negative side, Nikkei 225 index in Japan lost 2.27%, Shanghai composite index in China lost 1.03%, and Hang Seng index in Hong Kong fell 2.70%.

- Turkiye

In Turkiye, the annual inflation rate was 54.44% in February, according to official figures on Thursday.

BIST 100 index closed Thursday at 2,023.29 points with an increase of 1.87%, while the US dollar / Turkish lira parity was at 14.1209 at the last close.

*Writing by Gokhan Ergocun