Markets are negative with Russia's invasion of Ukraine

After Russian President Vladimir Putin announced that they had launched a special military operation in Donbas in eastern Ukraine, explosions were heard in various cities of the country, including the capital of Ukraine, Kiev. While Russia closed its airspace on the Belarusian border with Ukraine, martial law was declared in Ukraine.

Russia's invasion of Ukraine begins

Martial law declared in Ukraine

Biden to announce sanctions against Russia over Ukraine operation

Following the developments, the Russian Ministry of Defense announced that the air defense systems, military airports and air forces in Ukraine were neutralized with "high precision weapons".

Ukrainian Foreign Minister Dmytro Kuleba stated that Putin started a large-scale war against Ukraine and attacks continue in peaceful cities of the country, adding, "Ukraine will defend itself and win. The world can and must stop Putin." said. U.S. President Joe Biden, on the other hand, emphasized that Russia is the only responsible for the death and destruction caused by the attack, and said, "The United States and its allies will respond with unity and determination." used the phrase.

Following the developments, it was reported that Biden will announce the new sanctions that the USA and its allies will impose on Russia, and that NATO Ambassadors will hold an extraordinary meeting.

White House Spokesperson Jen Psaki, in a statement yesterday evening, stated that the US will respond to Russia's steps with harsh economic sanctions, but Biden will not send American troops to Ukraine to fight Russia in any scenario.

With these developments, the declines in Asian stock markets and US and European index futures contracts approached 3 percent. As commodity prices gained momentum, the barrel price of Brent oil tested $100 in Asian futures for the first time since September 2014. The ounce price of gold stabilized at $1,942 after hitting $1,949, its highest level since January 2021. Due to the developments in Russia and Ukraine, the two leading wheat producers in the world, the increase in wheat prices approached 6 percent. While it was observed that the demand for the bond market increased with the increasing risk perception, the 10-year bond interest rate of the USA decreased from 2 percent to below 1.87 percent.

On the other hand, Moscow Stock Exchange announced that transactions in all markets were suspended until further notice, while the dollar/Russian ruble rose to a 6-year high of 84.7.

In the New York stock market, the selling trend continued with the effect of increasing geopolitical risks yesterday, and the Dow Jones index lost 1.38 percent, the S&P 500 index 1.84 percent and the Nasdaq index 2.57 percent at the close. The dollar index, which closed at 96.2 levels yesterday, is at 96.6 levels with an increase of 0.5 percent today.

While the risk perception on the European side increased significantly after the tension between Russia and Ukraine turned into a hot conflict, natural gas prices in March futures contracts increased by more than 10 percent to 88 euros. In an environment where developments increased the upside risks in inflation expectations, the Eurozone's January inflation figures, which were announced yesterday, reached the highest level in its history with 5.1 percent. On the equity markets side, a mixed course was observed, while the DAX 30 index decreased by 0.42 percent in Germany, the CAC 40 index decreased by 0.1 percent in France, and the FTSE 100 index increased by 0.05 percent in the UK. After closing at 1.1305 levels with 0.2 percent depreciation yesterday, the euro/dollar parity declined to the 1.12 limit today.

On the Asian side, with increasing geopolitical risks, the Nikkei 225 index is 2.2 percent in Japan, the Shanghai composite index is 1.7 percent in China, the Hang Seng index is 3.2 percent in Hong Kong and the Kospi index is 2% in South Korea. It is trading down 0.7 percent.

The BIST 100 index, which followed a fluctuating course in Borsa Istanbul yesterday, finished the day at 2,016.03 points with a decrease of 0.07 percent. Dollar/TL is traded at 13,8750 at the opening of the interbank market today, after closing at 13,8221 with an increase of 0.1 percent yesterday.

Analysts stated that the news flow on the Russia-Ukraine crisis remained at the center of the agenda, adding that volatility in the stock markets may increase and investors should act cautiously.

Emphasizing that the reflections of the developments on energy prices will be critical in terms of inflation expectations and the course of monetary policies, the analysts noted that the statements of the officials of the US Central Bank and the European Central Bank and the summary of the Monetary Policy Committee meeting to be announced by the Central Bank of the Republic of Turkey will be followed today.

Reminding that weekly monetary and bank statistics in the country and growth data in the USA abroad will be followed today, analysts reported that, technically, 1.955 and 1.900 levels in the BIST 100 index are support and 2.050 points are resistance.