Title: European Stocks Drop Sharply; BP, SocGen, Renault Fall on Russian Links
Feb 28, 2022 03:32AM ET
European stock markets fell sharply on Monday as investors digested news that Western governments are tightening sanctions against Russia and that President Vladimir Putin has put his country's nuclear deterrent on high alert.
At 3:50 AM ET, Germany's DAX was trading 2.3% lower, France's CAC 40 was down 2.6%, and the UK's FTSE 100 was down 1.9%.
The poor start to the week came after Western countries over the weekend announced plans for more sanctions against Russia, which continues to attack targets in Ukraine and is barring some Russian banks from the SWIFT financial messaging system used by most financial institutions around the world for trillions of dollars worth of transactions.
However, payments for Russian energy supplies will still be possible.
In addition, the EU and the US announced measures that froze more than half of the Russian central bank's foreign reserves, limiting its ability to support the rouble, which fell by about 30% in early trading on Monday. This prompted the Bank of Russia to raise its key interest rate to 20%, while S&P Global Ratings downgraded Russian bonds to junk status.
The EU also announced that it would supply Ukraine with lethal weapons for self-defense, and EU Commission chief Ursula von der Leyen signaled that the EU would accept a membership application from the country. Russian President Vladimir Putin put Russia's nuclear weapons on high alert on Sunday in response to the West's more aggressive stance.
All this marks a rapid escalation in the efforts of the US and its allies to isolate Russia.