It has been a fairly volatile trading session for the European equity markets, which opened lower, rebounded slightly during the day but gave back recent gains to finish on the negative side as the escalating crisis in Ukraine continues to weigh heavily on market sentiment and limits any possible risk appetite. The CAC, DAX, IBEX and London benchmark index retreated sharply between 0.7% and 1.8%.
Heavy losses in the UK mining stocks dragged the index lower in London. Base metals prices came under renewed pressure today amid concerns about supply issues in Ukraine. LME Aluminium slid lower to retest $1860, while Copper also plunged towards the $6550 area.
In precious metals, both gold and silver reported heavy losses with Gold trading back to the $1300 area. Consequently, Rio Tinto, Fresnillo, Randgold, BHP Billiton and Glencore retreated between 2% and 5.5%.
On the macroeconomic front, UK inflation fell to 1.6%% y/y in March, in line with expectations, while BRC retail sales index declined sharply by 1.7% in March against estimates of 1.0% drop. In the US, CPI inflation data increased to 1.5% y/y in March, slightly above analysts’ expectations, while the NY Fed manufacturing idex rose strongly to 1.29 in April versus estimates of 8.0.
It seems that the main focus will turn to the upcoming meeting in Geneva on Thursday, where leaders from the US, Russia and Eurozone will be looking closely for a resolution of the ongoing crisis in Ukraine.
Tomorrow sees the release of the Chinese GDP data as well as industrial output and retail sales, while in the UK the main attention will switch to the ILO unemployment and average earnings figures. In the US, market participants will be keeping an eye on the building permits, house starts as well as industrial output data.