Tough sanctions on Russia knock 2% off European stocks

Crude oil jumped almost 5% while Russia's rouble plunged nearly 30% to a record low after Western nations imposed sanctions including blocking big Russian banks from the SWIFT global payments system. European banks most exposed to Russia, including Austria's Raiffeisen Bank, UniCredit and Societe Generale, dropped between 6.3% and 15.8%, while the wider euro zone banking index fell 5.2%.

European stocks slumped on Monday as Western countries imposed tough new sanctions on Russia following its invasion of Ukraine, while soaring oil prices fed into fears of runaway inflation.

By 0810 GMT, the pan-European STOXX 600 index fell 2.1%. The German DAX dropped dropped 2.0%, while the UK's FTSE 100 fell 0.9%. Crude oil jumped almost 5% while Russia's rouble plunged nearly 30% to a record low after Western nations imposed sanctions including blocking big Russian banks from the SWIFT global payments system.

European banks most exposed to Russia, including Austria's Raiffeisen Bank, UniCredit and Societe Generale, dropped between 6.3% and 15.8%, while the wider euro zone banking index fell 5.2%. Adding to nerves, President Vladimir Putin put Russia's nuclear deterrent on high alert in the face of a barrage of Western reprisals.

Goldman Sachs forecast European headline inflation to rise sharply to 5% in 2022 and said the crisis could shave off as much as 0.4% of euro area GDP this year. Shares of London-listed energy major BP slid 4.1% after the biggest foreign investor in Russia said it was abandoning its stake in state oil company Rosneft at a cost of up to $25 billion.

France's Renault, which controls Russian carmaker Avtovaz, fell 6.9%. Defence company Rheinmetall shot up 43% after German Chancellor Olaf Scholz said on Sunday the country would sharply increase its spending on defence to more than 2% of its economic output.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)