Asian and American market losses and oil continues to make progress steadily

2022-03-08T18:59:26
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Asian and American market losses and oil continues to make progress steadily : US stock markets closed sharply lower.

Investors continue to suffer from the war in Ukraine.
Oil prices are on the rise. West Texas Intermediate’s crude barrel reached $130.5, its highest level since July 2008.
Energy prices are rising with the prospect of the West boycotting Russian oil. 

Such a decision could cause a shock to black gold and gas prices, with the risk of inflationary stagnation

Evest follows market developments in the following report.

Topics

Wall Street losses

Fitch downgrades long-term default classification for Belarus

Gold at its highest level in a year and a half

Oil rises in early trading

Russian warnings of oil reaching $300 if sanctions are imposed on the oil sector

Japan’s Stock Exchange in the Red Zone

Wall Street losses

The Dow Jones index declined by 2.89% to 32817.38 points. The Nasdaq Index lost 3.62 points to 12830.96.

Uber has raised its planned targets for the first quarter of 2022.
US chauffeur-to-car (VTC) and the meal-delivery giant is now targeting a modified Ebitda of $130-$150 million and $150 million,
compared to $100-$130 million to date. 

This exceeds Bloomberg’s projections ($120.4 million).

In the Nasdaq index, which fell by 3.6%, Uber’s stock fell by more than 4% to $28.63.

Fitch downgrades long-term default classification for Belarus

The international classification agency Fitch downgrades Belarus’ foreign currency default long-term issuer rating (IDR) to “CCC” from “B”.

In a statement, the Agency said: “Fitch Credit Rating Agency downgraded the default rating of Belarus’ long-term foreign-currency issuer to ‘CCC’.”

As noted in the Agency, the downgrade is due to a number of factors,
including possible sanctions and the role of Belarus in the Russian military operation in Ukraine. 

All of this, according to Fitch, poses a threat to total financial stability.

The Agency does not expect Russia to provide serious financial support to
Belarus for the recovery of Eurobonds in 2023 and states that Belarus’s geopolitical risks, as before, are high.

Thus, Fitch expressed doubts about Belarus’s ability to meet its external obligations and considered its financial future really uncertain.

Gold at its highest level in a year and a half

Gold prices jumped to their highest price since August 2020 after investors freaked out about the Ukrainian War and oil market unrest spilled into assets they saw as safer.

The most-traded gold futures, for next month’s delivery, rose above $2,000 an ounce on Monday before its gains were reduced.

They recently added 1.5 percent to trade around 1,995.80 dollars.

The recent rise in gold prices helped precious metal to break out of the recent recession.

As of Friday, gold prices rose in 11 out of 15 sessions recently.

The last time gold was traded continuously was over $2,000 an ounce in August 2020 when the Covid-19 virus jammed global economic prospects.

The United States dollar has also benefited from growing uncertainty about the economic implications of the conflict in Ukraine.

The US dollar index ICE, which measures the US currency against a basket of currencies, approached its highest level since May 2020 on Monday.

Elsewhere in the market, the price of Bitcoin fell by about 2.8% on Monday and traded around $38,318, as investors withdrew from assets seen as risky.

Oil rises in early trading

Oil prices rose in early trading on Tuesday. However, it had not reached its multi-year highs the previous day.

In the morning, the price of a Brent North Sea barrel (159 liters) was the US $127.88. That was $4.67 more than the day before.

The price of a West Texas Intermediate (WTI) barrel increased by $3.73 to $123.13.

On Monday, Brent crude rose to about $139, while West Texas Intermediate crude cost more than $130 at its peak. 

The highest levels since 2008 have been reached in each case.

US Secretary of State Anthony Plinkin’s comments were the main reason why the Russian oil import embargo was put forward.
While this US import embargo continues, the EU is divided on this issue. 

Japan’s Nikkei closed at a 16-month low on Tuesday,
as investors were concerned that rising oil and other commodity prices would harm corporate profits and slow economic growth.

Wall Street’s major indices declined sharply overnight, with the Nasdaq Composite Index (IXIC) confirming that it was in a falling market,
where a possible embargo on oil imports from Russia led to higher crude oil prices and reinforced concern about rising inflation.

On Tuesday, there was an anticipation of oil prices as Brent crude futures traded at $125 per barrel, almost 10% below the 14-year high recorded in the last session.

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Russian warnings of oil reaching $300 if sanctions are imposed on the oil sector

Alexander Novak, Russia’s deputy prime minister,
has issued a warning of “severe consequences” that could affect the world if the West resorted to the embargo on Russian oil and gas.

Novak said oil prices could reach $300 per barrel, more than double what they are today.

“It is quite clear that the embargo on Russian oil will have serious consequences for the world market,” the Kremlin official said.

“Higher oil prices will not be expected – prices could reach $300 or more,” Novak added.

Concern over a US and European embargo on Russian oil and gas led West Texas Intermediate to climb to a 13-year high of $130.

West Texas Intermediate crude futures closed in Monday’s session up 3.2% at $119.40, the highest level since September 2008.

Brent crude, which reached $139.13 yesterday, closed at $123.21, its highest level since July 2008.

Japan’s Stock Exchange in the Red Zone

All 33 industrial sub-indices on the Tokyo Stock Exchange declined, with refiners (IPETE.T) leading the declines by 6.31%,
followed by steel manufacturers (ISTIL.T), which fell by 6.21%.

IPRCS.T reversed course to lower, declining by 0.30%.

Hoya and Terumo gave up most gains to end up 0.92% and 0.76% respectively.

In the meantime, technology stocks advanced, with stocks of air-conditioning manufacturer Daikin Industries (6367.T) rose by 1.76%
and stocks of android manufacturer Fanuc (6954.T) rose by 1.14%.

There were 26 stocks higher on the Nikkei index compared to 199 stocks lower.

Stocks traded on the main board of the Tokyo Stock Exchange are of 1.87 billion, compared to the average of 1.32 billion in the past 30 days.

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