Stock market news: Dow Jones erases 859 point loss as Wall Street fights back

Markets in turmoil after Putin sends in troop in dawn move

Boris Johnson says Russia has chosen ‘path of destruction’ after Putin launches ‘military operation’ in Ukraine

The Dow Jones erased an 859 point drop to stunningly end in positive territory at the close of the market on Thursday.

The major US indexes all rose after seeing sharp drops earlier in the day in the wake of Russia’s invasion of Ukraine.

The S&P 500 also ended the day 1.1 per cent higher, after dropping more than 2. per cent earlier in the day.

Investors seemingly took advantage of the market dip in tech, with Netflix ending up nearly five per cent, Microsoft up three per cent, and Alphabet and Meta rising by 2.5 per cent.

Earlier the price of oil has jumped to a seven-year high to nearly $105 (£78).

Brent crude is 6.6 per cent higher at $103.21 a barrel, the highest since August 2014, while US light crude has jumped 6.2 per cent  to $97.75 a barrel.

Gas prices are also on the rise, up by 40 per cent, amid fears that the conflict will disrupt global supply chains.

Wall Street fell sharply at the opening on Thursday following the Russian invasion of Ukraine.

The Dow Jones Industrial Average plunged more than 800 points or approximately 2.5 per cent.

Panicked investors fled for the safety of fixed income assets as markets reacted to the worst case geopolitical scenario on the back of the impact of sky-high inflation.

In London, the FTSE 100 index plunged more than 200 points, or 2.7 per cent, upon opening on Thursday in reaction to Russia’s invasion of Ukraine, which US President Joe Biden described as “unprovoked and unjustified”.

Key Points

• Markets rocked by Russian invasion of Ukraine
• Russia stock market crashes after dawn air raids
• RAC warns petrol prices could soar to £1.60

[24 February 2022 13:45 · Matt Mathers]

Commodity prices soar

Russia’s attack on Ukraine roiled global markets Thursday, driving up prices for crude oil and natural gas as investors flood into gold and government debt – traditional safe havens.

Brent crude, the global oil-price benchmark hit $102, topping $100 a barrel for the first time since 2014. Analysts warned on Wednesday that a full-scale attack on Ukraine from Russia could rapidly drive prices well above £1.50 a litre at the pump for British consumers.

Our economics editor Anna Isaac reports:

[24 February 2022 14:24 · Matt Mathers]

Russian rouble and Turkish lira vulnerable

More reaction from the city.

Cristian Maggio, head of strategy at TD securities, London said: “Currencies that will underperform the most are the most volatile - the Russian rouble and the Turkish lira.

"For the rouble and not to mention the Ukrainian currency the other risk is that liquidity simply drags out. Investors will not want to be involved at all.

"What’s going to happen, only Putin knows. As usual, Russian sources denied any intention to be militarily involved in Ukraine  and here we are, in the largest-scale military operation in Europe since World War Two. Anything can happen from here.

"The safe-haven bid is exactly what is happening."

[24 February 2022 14:59 · Matt Mathers]

Ukraine crisis: Wall Street plunges on opening as Russian invasion rattles markets

Wall Street fell sharply at the opening on Thursday following the Russian invasion of Ukraine.

The Dow Jones Industrial Average plunged more than 800 points or approximately 2.5 per cent.

Panicked investors fled for the safety of fixed income assets as markets reacted to the worst case geopolitical scenario on the back of the impact of sky-high inflation.

My colleague Oliver O’Connell will have more on this story as it comes in:

[24 February 2022 15:07 · Matt Mathers]

Conflict could hit UK seasonal workforce

Ukrainians made up two-thirds of the UK’s seasonal workforce last year - prompting questions over how the conflict might affect recruitment on British farms.

A total of 19,920 seasonal worker visas were issued to Ukrainian nationals in 2021, 67% of the total, according to Home Office immigration figures.

The equivalent number for Russian nationals is 2,278, or 8%.

The Migration Observatory at the University of Oxford said the figures raise "questions about the potential impact of conflict in Ukraine on recruitment to British farms, as the security situation in the nation deteriorates".

Ukrainians were the second most common nationality among people granted UK work visas in 2021, almost exclusively as a result of the seasonal worker visa, according to the Observatory.

Director Madeleine Sumption said: "For most of the past 15 years, the majority of work migrants coming to the UK were from EU countries. Since the end of EU free movement, the large majority now come from non-EU countries.

"Today’s data show how heavily UK farms have relied on Ukrainian workers in particular, raising the question whether this source of workers will be disrupted by unpredictable events in that region."

[24 February 2022 15:30 · Matt Mathers]

Food prices set to rise and inflation could hit 8.2% due to invasion

The government said it will monitor and offer support as required if the full-scale invasion of Ukraine by Russia leads to a surge in global food prices.

Ukraine is a major supplier of wheat and corn, with economists warning the cost-of-living crisis in the UK could be exacerbated with inflation rising well beyond current predictions of around 7% later this year.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said if the jumps in oil, gas and electricity products on Thursday are sustained, it could push inflation to 8.2% in April.

It would only fall back to 6.5% by the end of the year, he added.

Inflation hit 5.5% in January and the Bank of England believes it will peak at more than 7% in April when huge 50% increases in domestic energy bills when the new price cap hits.

Mr Tombs said: "Today’s surge in oil, natural gas and electricity prices, if sustained, points to an extra 1.5pp boost to the UK CPI.

"CPI inflation now likely to peak at circa 8.2% in April and only come down to 6.5% by the end of the year.

"Hard to see how households’ real spending keeps rising."

[24 February 2022 16:02 · Matt Mathers]

Bank of Russia intervenes to prop up faltering rouble

Russia’s central bank said it would intervene in currency markets to prop up the faltering rouble, which crashed to an  all-time low of 89.60 against the US dollar after Putin launched a full-scale invasion.

The bank said: “To stabilise the situation on the financial market, the Bank of Russia decided to start interventions on the currency market.

“The bank has also decided to expand the list of securities it accepts as collateral in exchange for liquidity it provides, and will hold operations to offer extra liquidity to the Russian banking sector.”

[24 February 2022 16:15 · Matt Mathers]

Boris Johnson: We must wean ourselves off Russian oil

Boris Johnson is rallying European leaders to sever the dependence on Russian oil that has given Vladimir Putin a "grip" on western politics in the wake of the invasion of Ukraine.

The prime minister was working with allies on Thursday to create a "massive" package of sanctions that will "hobble the Russia economy".

“Today, in concert with our allies, we will agree a massive package of economic sanctions designed in time to hobble the Russian economy.

“And to that end, we must also collectively cease the dependence on Russian oil and gas that for too long has given Putin his grip on Western politics.”

[24 February 2022 16:40 · Matt Mathers]

ICYMI: Warning over petrol prices hitting £1.60 a litre as Russia invades Ukraine

Motorists are being warned over the possibility of petrol prices soaring to £1.60 a litre following Russia’s invasion of Ukraine.

The price of Brent crude oil hit its highest level in eight years after increasing by 6.3% to 102.90 US dollars per barrel shortly after 8am on Thursday.

Average fuel prices at UK forecourts are already at record highs, and the situation is expected to worsen as retailers pass on further rises in wholesale costs.

[24 February 2022 17:51 · Matt Mathers]

Major buyers of Russian oil struggle with bank guarantees

Top buyers of Russian are oil struggling to secure guarantees at Western banks or find ships to take crude from one of the world’s largest producers.

At least three major buyers of Russian oil have been unable to open letters of credit from Western banks to cover purchases on Thursday, four trading sources told Reuters, citing market uncertainty after the Russian invasion.

Russia produces every tenth barrel in the world and oil prices jumped to above $100 per barrel on Thursday, their highest since 2014, due to fears of disruptions.

The oil market is already suffering from tight supplies due to years of low investment and amid booming demand as pandemic-linked restrictions ease around the world.

“Banks are not willing to open LCs for the moment so it is a bit of a standoff,” one of the sources said. He asked not to be named due to the sensitivity of the issue.

Letters of credit from the bank of the buyer are standard practice in commodities trading and guarantee the seller’s bank that payment will be made in full and on time.

Top Russian oil buyers include Western oil majors such as BP and Shell, ENI, TotalEnergies, Equinor, Chevron and Exxon Mobil and trading houses such as Vitol, Glencore, Trafigura, Gunvor and Mercuria.

The sources did not name which banks refused to issue LCs.

[24 February 2022 19:12 · Graeme Massie]

Russian ‘Google’ loses more than half of value in wake of invasion

Shares of Yandex, which is often called Russia’s Google, saw its value nosedive 53 per cent on Thursday following Russia’s invasion of Ukraine. The company has now lost nearly three-quarters of its market value in 2022.