A storm on stock exchanges and increases in raw material prices

Financial markets seem to be at the peak of fear after the escalation of the conflict in Ukraine. In practice, Russia is taking control of the two republics that have the largest deposits of raw materials. The US has announced sanctions against Russia.

The anxiety seems to be taking a toll on the stock market, where stock indices can bear losses, and investors can potentially benefit from falling stock prices.

One move wiped out all DAX profit from the past year

Pose with the Russian MOEX index, which lost almost 4 percent at the beginning of the session, one of the most important reactions may concern DAX. The main index of the German stock exchange may have already dropped below the potential key support in the region of 14800 points and quickly reached the lowest levels since March 2021 this morning. It can be said that this move almost wiped out all potential gains from last year.

The indices in the United States may look no less interesting. Contract for Nasdaq xnumx It seems to test the minimum from the end of January at 13700 points. It comes to this after when Russian President Vladimir Putin has recognized two self-proclaimed separatist republics in Ukraine and ordered troops to enter these regions, and the United States is to announce further sanctions against Russia.

Ricochet sanctions? Oil, gas and gold are more expensive

Any sanctions against Russia may affect the energy resources market. Today Brent barrel price it came close to a round $ 100, beating the 7-year high. Gas prices in Europe also appear to be rising, which in turn could perpetuate inflation.

Inflation with sanctions can in turn lead to the worst condition of the economy, i.e. stagflation. It is a period of high prices and weak economic growth, economically debilitating enterprises and households. A factor mitigating the rise in prices may be a quick agreement between the US and Iran. Oil market analysts indicate that a potential deal may translate into an increase in the supply of Iranian oil by 1 million barrels per day.

It is also getting more expensive gold: This morning the ounce had to be paid over $ 1900. This may mean that investors are trying to hedge against geopolitical and inflationary risks by placing their capital in the bullion.