The global market was on Monday thrown into turmoil as over €54 billion was removed from the value of London’s top 350 companies just a couple of hours after markets opened.
This came as tensions continue over Ukraine and the Armed Forces Minister, James Heappey, suggested the risk of war was the highest it has been in Europe since the 1950s.
“I fear that we are closer than we’ve been on this continent for 70 years. There’s 130,000 Russian troops around the border of Ukraine,” he told BBC Radio 4’s Today.
The reaction in global markets was stark and worse for those in continental Europe. In London, the FTSE 100 was trading down more than 2 per cent, pushed down to its lowest point in two weeks.
The biggest stock indexes in Germany and France fell back by 3.5 per cent.
By far the biggest loser on the FTSE 100 was Evraz, which lost more than a third of its value – an unusually big drop for such a large firm.
It was one of the world’s biggest steel producers and a lot of the company’s assets are in Russia.
The drop was enough to wipe around €650 million off the value of the shares held by Chelsea owner, Roman Abramovich – Evraz’s biggest shareholder.
Danni Hewson, a financial analyst at investment platform AJ Bell said “the prospect of war is rarely good for stock markets, and so the new trading week has begun on a bad note across Europe and Asia.
“This was as investors fear the alarm clock is about to sound on a physical battle between Russia and Ukraine.’’
Shares in oil major BP were down more than three per cent because the business has a nearly 20 per cent stake in Russian energy giant, Rosneft.
BP’s share price drop was particularly surprising as oil prices are around a seven-year high.
Susannah Streeter, an analyst at investment platform Hargreaves Lansdown, said with worries that inflation was already running far too hot, the possibility Russia troops could move across the border has led to another surge in the oil price to above 95 dollars (£70) a barrel.
He said the price of oil was edging up towards $96, a level Brent crude has not been at since 2014.
“Energy markets are clearly on edge and if supplies are threatened, there is a risk oil will shoot up even higher, adding to price pressures for companies.’’
