Full-blown Russian incursion of Ukraine triggers global market rout

Global investors fled stocks today after they woke up to the news that Russian President Vladimir Putin had ordered a full invasion of Ukraine.

Risk appetite poured out of traders’ mindsets as they flowed into safe assets to limit the potential spillover economic effects of Moscow troops closing in on Kiev.

The capital’s premier FTSE 100 index registered its worst day in 20 months, tumbling 3.88 per cent, while the domestically-focused FTSE 250 lost 2.82 per cent.

Jitters in the City bled into the Continent as the rapid pace at which Russian troops advanced in  Ukraine roiled European investors.

The pan-European Stoxx 600 index collapsed 3.28 per cent, while Germany’s Dax 30 closed nearly four per cent lower.

France’s Cac 40 plummeted 3.83 per cent.

“European equities are likely to underperform their US and Asian counterparts. Europe is far more exposed to Russia than other regions,” Lars Kalbreier, global chief investment office at Edmond de Rothschild, said.

The selloff rippled across the Atlantic, with all of Wall Street’s top indexes posting sobering days.

The S&P 500 fell 0.3 per cent and the Dow Jones dropped 1.28 per cent in afternoon exchanges.

The sharp falls in global stock prices indicates markets were not alive to the prospect of a full-blown war between Russia and Ukraine.

Tumbling prices “shows markets had not fully priced in the likelihood of deeper conflict,” Mark Haefele, chief investment officer, UBS Global Wealth Management.

The confirmation of war in eastern Europe prompted global traders to ditch stocks and flee to safer assets to shield their portfolios.

Yields on US 10-year Treasuries, seen as a barometer for global risk appetite, climbed as much as five basis points.