Market update: Global markets fall as US bans Russian oil, gold jumps

The Ukraine war, rising inflation and fears of further economic woes ate into investor sentiment and saw most indexes close lower.

Global shares continued to trend lower on Tuesday with yet another negative close for major indexes.

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The MSCI world equity index fell 0.59% amid investor fretting across markets as fears of further pain shot down the little optimism that reared its head earlier in the day. The MSCI World Index is down 7.8% over the past month.

The Dow Jones Industrial Average closed -184.74 points, or 0.56% lower to extend losses to 32,632.64. Elsewhere, the S&P 500 shed 0.72% and the Nasdaq Composite closed 0.28% down.

Across Europe, the Stoxx 600 fell 0.51% and the FTSE 100 added just 0.07%.

US bans Russia’s oil

On Tuesday, US president Joe Biden announced a ban on Russian oil and gas imports, intensifying the pressure on Vladimir Putin after his invasion of Ukraine late last month. 

The UK also took a similar step, noting in an announcement that it would begin cutting on imports of oil and related products from Russia. It is expected Britain will have phased out all Russia-linked oil imports by the end of the year.

Analyst says EU ban on Russian oil would be a major blow

While the US and UK moves are significant, one geopolitical risk analyst told Reuters that the biggest blow to Russia would be a ban by the EU.

The analyst noted that Europe has a “relatively high dependence on energy supplies from Russia,” and a total ban from the block would spell economic disaster for the country.

But as President Biden noted, the decisions do not come with costs as energy prices rocket and ordinary consumers feel the pain at the pump.

This decision today is not without costs here at home. Putin’s war is already hurting American families at the pump — and this will drive up costs further.

So, I will take every step we can to minimize Putin’s price hike here at home.

— President Biden (@POTUS) March 8, 2022

News of the ban on Russian oil imports refreshed oil prices higher, with international benchmark Brent crude hitting highs above $131 per barrel. 

The West Texas Intermediate (WTI)crude jumped more than 7% on Biden’s announcement to break above $130 per barrel. However, the US benchmark’s spike to a 13-year high cooled off before trending around $123 a barrel at the market’s close.

Gold extends rally, Nickel hits $100,000 per ton

Gold prices moved towards all-time highs earlier in the session as investors fled into the precious metal in search of a safe haven. The general risk-off sentiment saw spot gold jump more than 3% to $2,069.89 per ounce. Gold’s all-time high of $2,072.50 was hit in August 2020.

In other market news, Nickel prices hit $100,000 per ton on Tuesday, with the London Metal Exchange (LME) forced to halt trading following claims of short-covering by one of nickel’s largest producers in the world.