Europe open: Stocks lower on new Ukraine assault, Fed's Bullard comments
By Frank Prenesti
Date: Tuesday 19 Apr 2022
(Sharecast News) - European shares opened sharply lower on Tuesday as Russia started its assault on eastern Ukraine and more hawkish comments from US federal Reserve officials dampened sentiment.
The pan-European Stoxx 600 was down 1% in early deals with all major regional bourses lower. France and Germany were off 1.25% and 1% respectively.
Russian forces launched their long-expected offensive in eastern Ukraine after massing troops and artillery there for the past fortnight.
In the US, St Louis Federal Reserve Bank President James Bullard on Monday repeated his case for increasing interest rates to 3.5% by the end of the year on Monday, saying domestic inflation was "far too high".
"The Bullard comments really encapsulate the quandary that many of the world's central banks have found themselves in. Having completely missed the ball around transitory versus embedded inflation, there are no palatable solutions," said OANDA analyst Jeffrey Halley.
"Luckily, they have plenty of excuses in the shape of the pandemic and the Ukraine war. Central banks can now play catchup, hike aggressively and run the risk of recessions, something they have weaned the world of since the GFC via monetary policy. Getting the pain over and done may be the least worst option."
In equity news, shares in French reinsurer Scor fell after the company said it expects to book charges for claims related to the Ukraine conflict.
Shares in THG fell 6.6% after the founder of one of its leading beauty businesses resigned and brands complained of late payments, according to a report in the Sunday Times.
Alexia Inge, co-founder of Cult Beauty, which THG bought for £275m last year, emailed staff this month to say she was "exhausted to the bone" and would be leaving the company in what was the "hardest decision" of her life.
Precision instrument maker Spectris gained after the company sold its Omega Engineering unit to Arcline Investment Management for $525m (£403m) and unveiled a £300m share buyback.
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