European stocks close lower on Russian offensive and cautious investors

European stocks closed lower on Tuesday (1st) as investors followed the unfolding of the war in Ukraine after the invasion of Russia.

Difficulties for countries to reach a ceasefire agreement and sanctions on the Russian economy make the market cautious and reduce risk appetite, penalizing equities.

The Stoxx 600 index, which brings together the main stocks in the region, ended down 2.37%.

In London, the FTSE 100 dropped 1.72%, while in Frankfurt, the DAX dropped 3.85%, with Deutsche Bank (-7.57%) and Commerzbank (-11.20%) being the shares. most traded on the day.

The Frankfurt, Paris and Milan stock exchanges ended at the day’s lows. Milan’s FTSE MIB lost 4.14, with Intesa Sanpaolo (-7.72%) and Telecom Italia (-9.05%) pulling the drops. Paris’ CAC 40 is down 3.94%. In Lisbon, the PSI 20 dropped 1.17%, and the Ibex 35, from Madrid, 3.43%.

Russian bombs hit the central square of Kharkiv, Ukraine’s second-largest city, and other civilian targets on Tuesday. A 64km convoy of tanks and other vehicles also threatens Kiev. Western officials speculate that the Kremlin is trying to attract Ukrainian forces to defend Kharkiv, while a larger Russian force surrounds the country’s capital.

European Council President Charles Michel said today that Russia commits “geopolitical terrorism, pure and simple”, with its military action in Ukraine. During a session at the European Parliament to discuss the crisis, he said Russia needs to “stop the war and go home” after President Vladimir Putin launched a “brutal war in Ukraine without justification”.

In an exclusive interview with CNN International and Reuters, Ukrainian President Volodymyr Zelensky asked US President Joe Biden to deliver a strong and “useful” message about Russia’s invasion of Ukraine in his State of the Union address.

At the session, European Commission President Ursula von der Leyen also stressed that the bloc needs to “work fast to cancel” its dependence on Russia in the energy sector.

But the search for diplomatic negotiations seems to continue. Another round of negotiations between the Russian and Ukrainian delegations is expected tomorrow.

Tuesday’s session (1st) was also marked by the release of European industrial purchasing manager indices (PMIs), including the euro zone, which fell to 58.2 in the final reading in February. . Germany’s fell to 58.4 and the United Kingdom’s rose to 58 in the same period. Also, Italy reported that its Gross Domestic Product (GDP) grew by 6.6% in 2021, while inflation continued to show strength in Germany.