Market Monitor - 11 March 2022

Market Monitor – 11 March 2022

Stock markets around the world have endured another turbulent week, with fears about the economic impact of the war in Ukraine continuing to dominate sentiment.

After last Friday’s global sell-off, share prices carried on falling during Monday’s sessions following reports that the United States was considering a ban on the import of Russian oil – in the wave of sanctions imposed at the start of the conflict, trade in crude and natural gas was largely exempt.

The possibility that sales of Russian gas and oil could also be blocked by the European Union, which is much more reliant than the US on such imports, has caused considerable anxiety among the European businesses and consumers who are already facing soaring energy bills.

There have been hopes that other major oil producers could step up to fill the gap left by Russia in order to keep prices under control. Reports on Wednesday that the United Arab Emirates may favour an increase in output by OPEC member countries sent crude values down by more than 10% – with global stock markets surging back into positive territory as a result. However, many analysts currently think it is unlikely that we will see any significant production increases in the short term.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.3% down for the week so far, with the S&P 500 losing 1.6%. While share prices in the US largely outperformed their European counterparts in the first two weeks of the conflict in Ukraine, investors in America may now be waking up to the likely global economic impact of the war – not least the prospect that it will drive inflation even higher. Indeed, the latest data shows that US inflation hit a 40-year high in February of 7.9%.

As the conflict pushes up the cost not just of energy but also of raw materials – the price of nickel doubled during trading on Tuesday – manufacturers are facing major rises in input costs this year.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 1.6% up for the week, manging to recover some of its recent losses with a strong rebound on Wednesday. Oil company Shell announced on Tuesday it was withdrawing from the Russian market, the latest in a wave of European and American companies which are exiting the country.

In Frankfurt, the DAX index ended Thursday’s session up 2.7% for the week, while France’s CAC 40 advanced 2.4% – although it is worth noting that these gains only made up around half of the losses sustained last week.

The DAX moved into bear-market territory – 20% lower than its recent high point – at the start of the week, before Wednesday’s recovery. Investors in Europe were not helped by an announcement from the European Central Bank on Thursday, indicating that it will soon start to tighten monetary policy and look to increase interest rates in response to rising inflation across the eurozone.


In Asia, the Hang Seng index in Hong Kong dipped 4.6%: its recent woes have seen it fall to around two-thirds of its level a year ago. While fears over the global economic outlook are part of the picture, weak performance by the Chinese automotive sector and the prospect of a strict lockdown in the region to curb the current surge in Covid-19 cases are doing little to help.

Japan’s Nikkei 225 index of leading shares, meanwhile, closed Thursday’s session 1.1% lower for the week, with strong domestic company earnings performance offset by concerns about global inflation and tighter monetary policy.

March 4
March 10
Change (%)
FTSE 100
FTSE All-share
S&P 500
Dow Jones
CAC 40
Hong Kong Hang Seng
Nikkei 225

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, as at 10 March 2022.

11 March 2022
Mark King
Mark King
Head of Investment Content
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