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Markets in the country gloomy as diplomatic hope for Ukraine-Russian solution begins to fade

A Kremlin spokesperson, Dmitry Peskov, said there were no concrete plans in place for a summit over Ukraine between Russian President Vladimir Putin and his US counterpart, Joe Biden. Photo: File

A Kremlin spokesperson, Dmitry Peskov, said there were no concrete plans in place for a summit over Ukraine between Russian President Vladimir Putin and his US counterpart, Joe Biden. Photo: File

Published Feb 22, 2022

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THE FINANCIAL markets yesterday turned negative as the glimmer of hope for a diplomatic solution dimmed in the Russia and Ukraine stand-off, following the Kremlin’s afternoon comments.

A Kremlin spokesperson, Dmitry Peskov, said there were no concrete plans in place for a summit over Ukraine between Russian President Vladimir Putin and his US counterpart, Joe Biden.

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This comes as Biden and Putin agreed to a proposal by France’s President Emanuel Macron to hold a summit over Ukraine.

The news raised expectations that a diplomatic solution could be reached, and the invasion of Ukraine avoided amid intensifying clashes in the eastern part of the country.

Peskov said a call or meeting between the US and Russian leaders could be set up at any moment.

“But it’s premature to talk about any specific plans for organising any kind of summits,” Peskov said.

Following this, stocks on the JSE reversed course and dipped after opening the week on a positive footing.

The JSE All Share Index fell by almost 1 percent to 75 675 index points by 3pm, after having edged higher above 76 700 index points earlier in the day.

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The losses at 3pm were led by Steinhoff. Its shares fell 7.5 percent to R3.68; Prosus dipped 6.7 percent to R1 040.64 per share; while Naspers and Sasol eased by 6 percent and 4.6 percent to R2 102.77 and R314.08 per share, respectively.

TreasuryONE currency strategist André Cilliers said the geopolitical tension in eastern Europe had continued to spook investors over the weekend.

“The Russia and Ukraine situation continues to drive global market moves, and with rising tensions over the weekend, we find risk sentiment still fairly negative,” Cilliers said. “The uncertainty over Russia’s next moves is keeping a lot of investors on the sidelines.”

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Riskier assets had another poor day of trading yesterday, as global financial markets remained on tenterhooks about the ever-increasing tension.

Gold prices fell by 0.2 percent to $1 895 (R28 628.62) an ounce, slipping from an over eight-month high of $1 908 hit earlier in the session, as safe-haven demand eased.

Oil prices, however, bounced back by 0.6 percent to $94.15 per barrel of Brent crude although market volatility is set to continue amid persistent uncertainty in Ukraine.

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Meanwhile, investors continued to monitor efforts to revive the 2015 Iran nuclear agreement after a senior EU official on Friday said a deal was “very, very close”.

Analysts said the potential deal could add more than 1 million barrels a day of Iranian crude to the market, easing the global supply challenges that arose from the Russia/Ukraine conflict.

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BUSINESS REPORT ONLINE

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