European Shares Dive On Inflation Worries

European stocks hit one-year lows on Monday in light of a possible Western ban on Russian oil.

Crude surged to almost $140 a barrel overnight and other key Russian exports like nickel and palladium also jumped against a backdrop of continued escalation of military conflict in Ukraine, raising worries of higher global inflation.

As the conflict enters its 12th day, Ukraine is set to ask the United Nations’ highest court today to intervene to halt Moscow’s invasion.

Russian President Vladimir Putin has said his campaign in Ukraine will not end until Kyiv stops fighting.

The pan European Stoxx 600 was down 3 percent at 409.69 after plunging 3.6 percent on Friday. The German DAX plummeted 3.9 percent, France’s CAC 40 index gave up 3.8 percent and the U.K.’s FTSE 100 was down 2 percent.

Banks led losses, with Lloyds Banking Group, Credit Agricole, Deutsche Bank, Societe Generale and Commerzbank plunging 7-11 percent.

British ad industry giant WPP fell 5.5 percent after announcing it is discontinuing operations in Russia in response to the invasion of Ukraine.

Spectris rose 1.2 percent after the instrumentation company said it ended negotiations to buy Oxford Instruments.

Miners and oil giants advanced on soaring metals and crude prices. Anglo American, Antofagasta, Glencore, BP Plc and Shell jumped 2-5 percent.

Swiss specialty chemicals company Clariant AG declined 5.4 percent. The company said it has suspended all its business with Russia in response to the Russian state’s intolerable acts of violence in the Ukraine.

In economic releases, German retail sales advanced 10.3 percent year-on-year in January, following a 0.8 percent rise each in December and November, data published by Destatis revealed. Sales were forecast to climb 9.8 percent.

Another report showed that German industrial orders expanded 1.8 percent month-on-month, slower than the December’s 3.0 percent increase. Nonetheless, this was faster than the economists’ forecast of +1.0 percent.

U.K. house prices rose at the fastest annual pace since mid-2007 to a record high in February, survey data from the Llyods Bank subsidiary Halifax showed earlier today.

The house price index rose 10.8 percent year-on-year, which was the biggest increase since June 2007, when it was 11.9 percent. House prices climbed 9.7 percent in each of the previous two months.

Investor morale in the euro zone plunged in March, a survey showed. The Sentix’s index for the region fell to -7.0 in March from 16.6 the previous month, hitting its lowest level since November 2020.