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Stocks rebound with more sanctions on Russia after the Ukraine attack, gold retreats

joe biden

Asia markets are set to be more resilient following a positive close in the US markets after a wild session overnight. Tech stocks led the broader markets to bounce off session lows as US President Joe Biden said more sanctions would be imposed on Russia after the military attack on Ukraine.

SPI futures are pointing to a 1.2% gain on the S&P/ASX 200 and the NZX 50 rose 1.3% in the first half an hour of trading.

US and EU stocks

All of the major EU stock markets deepened losses, with DAX down 3.96%, Euro Stoxx 50 falling 3.64%, and CAC 40 sliding 3.83%.US stocks were more resilient, rebounding after news of further US sanctions and more troops to be deployed.

The Dow Jones Industrial Average was up 0.28%, after losing more than 800 points at the session low, the S&P 500 rose 1.49%, and Nasdaq jumped 3.34%.

The growth sector outperformed the cyclical stocks as investors looked to buy dips in the technology sector after the Nasdaq fell into bear market territory earlier in the session. All the mega-cap companies rebounded sharply, with Microsoft, Alphabet, Amazon and Meta Platforms all jumping more than 4%, Apple up 1%. Tesla Motors was up 4.7% to $800 after hitting an intraday low at $700. Nvidia and Advanced Micro Devices were all up more than 6%.

The sectors sensitive to economic reopening, including bank and energy stocks fell amid worries that the economic sanctions on Russia and energy supply issues could negatively affect the global economy growth. JP Morgan Chase, Citigroup, and Wells Fargo fell between 2-5%.

On the earnings front, Coinbase beat earnings expectations, but the share price fell 6% in after-hours trading as the cryptocurrency broker warned investors of slowing growth in the first quarter. Beyond Meat's shares fell 12% in after-hours trading due to worse-than-expected performance in the fourth quarter and disappointing first-quarter guidance.

Treasuries

The 10-year US Treasury yield was flat at 1.97% after falling to 1.85% at the intraday low as investors looked for haven assets.

Germany's 10-year Bond Yield fell to 0.15% from 0.21% the previous day, and the France 10-year Bond Yield slid to 0.65% from 0.72% a day ago.

Commodities

The commodity markets had a roller-coaster session as risk sentiment played turn-around. Gold futures initially soared $66 to $1,976 at the session high but retreated sharply and closed at $1,900 per ounce.

WTI futures topped the $100-mark at a point, then cut gains and finished 1% higher at $ 93.02. The fresh sanctions on Russia from the US and EU could continue to weigh on the oil markets, with a large oil shipping stand-off on the Ukraine crisis. 

Currencies

The USD jumped amid the intensifying geopolitical tension. The dollar index surged 0.9%, to 97.03 after it spiked to 97.77 at a 20-month high. The Russian Rouble tanked to an all-time low, down 4.59% against the USD.

The eurodollar fell sharply, down 0.95% against the greenback. The pound was down 1.18% against the USD. All of the commodity currencies also weakened.

Cryptocurrencies

The leading cryptocurrencies were resilient. Both Bitcoin and Ethereum closed higher after dropping down to one-month lows. Bitcoin traded above $38,000 after falling to just above $34,000, and Ethereum bounced back to above $2,600 after hitting the intraday low at $2,303.


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