Mar 24, 2022 06:05AM ET
European stocks gave up their initial gains and were flat on Thursday as the war in Ukraine continues for a month and Western countries plan further sanctions against Russia.
European gas prices soared after Russian President Vladimir Putin announced that his country would require payment in roubles for gas sales to "unfriendly" countries.
Russian gas supplies about 40% of Europe's total consumption, and the move is likely to exacerbate energy shortages in the region and add to inflationary pressures.
Nervousness was evident as investors fled to sectors such as consumer stocks and utilities, which are less affected by economic crises.
The pan-European STOXX 600 index remained at Wednesday's level as it fell 1%, ending a five-day rally.
Concerns about tougher sanctions against Russia increased as US President Joe Biden arrived in Brussels for meetings of the NATO alliance, the G7, and the European Union.
So far, the sanctions have sent commodity prices soaring on fears of supply shortages.
The European oil and gas sector rose 0.6% to hit a two-week high. The index is up about 14% so far this year, outperformed only by the commodity index.
Meanwhile, Russian shares rose 7.7% as trading resumed after a month-long suspension.
Renault SA, the Western carmaker with the biggest presence in the Russian market, fell 1% after the company said it would stop operations at its Moscow plant.
Daimler Truck rose 8.3% after the company said it expected the COVID-19 pandemic and Russia's invasion of Ukraine to have little impact on its business in 2022 and forecast revenue growth of at least 14%.
After two months of declines in the STOXX 600 on inflation, monetary policy, and war worries, the previous meager gains are at stake in the last week of March.
Banking and technology stocks each fell 0.3%, while retail stocks were dragged down by a 2.9% drop in UK clothing retailer Next after the company cut its 2022–23 sales and profit forecast.