Today has brought another woeful start to trading on Monday, as heightened geopolitical risk compounds investor anxiety and drags on risk assets.
US stock indexes have dropped at the start of trading, as soaring tensions between Russia and the West over Ukraine worry investors.
Bitcoin tumbled to its lowest level since last July, as traders ditch risky assets such as crypto currencies.
Shares are under pressure, ahead of the key Federal Reserve policy meeting on Wednesday that could cement expectations of a March interest rate rise.
The Dow Jones Industrial Average of 30 large US companies is down 386 points, or 1.1%, at 33,878 points. Boeing (-3.5%), Disney (-2.9%), Goldman Sachs (-2.7%) and Visa (-2.3%) are leading the fallers.
The S&P 500 is down 1.5%, as is the tech-focused Nasdaq Composite.
The UK’s smaller stock index, the FTSE 250, is also having a torrid day.
The index of mid-size companies has tumbled by 3.25% today, down 723 points at 21540 points.
That’s its lowest level since the end of March 2021, and on track for its worst day in over a year (although it could yet recover some ground).
Bitcoin hits six-month low amid crypto turmoil
Bitcoin has fallen to around $33,800, down over 5% in the last 24 hours.
It’s now shed more than half its value since hitting record highs around $69,000 in November.
Bitcoin over the last two years Photograph: Refinitiv© Provided by The Guardian Bitcoin over the last two years Photograph: Refinitiv
Victoria Scholar, head of investment at interactive investor, says the crypto market is “in turmoil”, and there could be further falls ahead.
It looks as though the [Bitcoin] downtrend remains intact with the potential for further downside towards $30,000 as the next major round number support level, which coincides with the summer trough.
Similarly, ether has shed around 50% with $2000 as the next key level to watch. It looks like the bubble has burst as panic selling grips the market.
What this episode has taught us is that this is still a very nascent asset class with a high level of correlation between individual crypto assets, particularly on the way down. It has also taught us that for those willing to enjoy the ride higher, traders need to be able to stomach the sharp volatility and steep declines as well. Brave traders might use this major repricing as an opportunity to buy the dip.”
The tumble in crypto prices in recent weeks as wiped $1trn off the combined value of the sector since November’s peak.
Anxiety that US interest rates could be hiked several times this year is one factor hurting speculative assets. The Ukraine crisis is another.
Chris Weston of brokerage Pepperstone says macro forces, such as “higher US real rates, lower inflation expectations and a focus on reduced liquidity from the Fed” are hitting the crypto sector.
The Russian rouble weakened to its lowest level in over a year, as soaring tensions between Moscow and the West over Ukraine hits Russian assets.
The rouble has dropped by 2% today to around 79 to the US dollar, the lowest since November 2020.
The pressure on the rouble led the Bank of Russia to halt purchases of hard currencies.
Shares tumbled in Moscow today too. The MOEX index of Russian companies fell almost 6%, hitting its lowest level over a year. It’s fallen by 15% since the start of 2022.
Russian government debt also fell, pushing up Russia’s 10-year bond yields hit 9.76%, their highest since early 2016, Reuters reports (yields move inversely to prices)
