Markets tumble as fears over Ukraine intensify

Stocks in Europe and Asia tumbled with US equity-index futures and emerging currencies while the yen, gold and Treasuries gained as tensions over Ukraine intensified.

Russia’s central bank unexpectedly boosted its key interest rate 150 basis points as shares in Moscow plunged the most in five years, while wheat surged on supply concerns.

The Stoxx Europe 600 Index slid 1.7 per cent this morning in London and Standard and Poor's 500 Index futures fell the most in a month as US Secretary of State John Kerry flies to Kiev today. Russia's Micex index plummeted 10 per cent and the ruble slipped to a record versus the dollar, which strengthened against most emerging currencies. The yen added 0.4 per cent. Gold increased 1.7 per cent and Brent crude rose as much as 1.9 per cent. Ten-year Treasury yields declined to an almost one- month low.

Wheat surged as much as 4.5 percent, corn climbed to a five-month high and UK natural gas jumped the most in more than 16 months. Russia raised its seven-day auction rate to 7 per cent from 5.5 per cent as the US weighs sanctions against the country, the world's largest energy exporter, after President Vladimir Putin got lawmakers to endorse troop deployments and Ukraine said soldiers were already in the Crimea region.

Industrial metals retreated after Chinese manufacturing gauges for February signaled slower growth as officials prepare to meet this week on policy targets. A purchasing managers’ index of euro zone factory output is due today before US reports on consumer spending and factory activity.

“Risk aversion is the name of the game as Treasuries and the yen are rallying, as is gold, while oil is up as Russia is a major exporter,” said Dariusz Kowalczyk, a strategist at Credit Agricole CIB in Hong Kong. “Markets are increasingly concerned over escalation of the conflict in Ukraine and emerging currencies are suffering from contagion. Chinese PMI is weak and shows the manufacturing sector continues to deteriorate, and that is negative for China’s growth.”

Bloomberg