Russia-Ukraine crisis prompts markets to brace for heavy falls
Moscow's stock markets plunged to its lowest level in more than a year
Check out what's clicking on FoxBusiness.com.
The escalating crisis between Russia and Ukraine has prompted investors to brace for a bad day for Russian, Ukrainian, U.S., and global markets when they reopen on Tuesday, according to a report.
Russian President Vladimir Putin on Monday claimed that Ukraine is historically part of Russia during a lengthy televised address in which he signed decrees to recognize the independence of separatist regions of eastern Ukraine. Putin also ordered forces into those regions.
"I will start with the fact that modern Ukraine was entirely created by Russia or, to be more precise, by Bolshevik, Communist Russia," Putin said in the speech that was translated into English by the Kremlin. "I believe it is necessary to take a long-overdue decision to immediately recognize the independence and sovereignty of the Donetsk People’s Republic and Luhansk People’s Republic."
COFFEE PRICES SKYROCKETING FOR CUSTOMERS, ROASTERS: ‘EVERYBODY’S BASICALLY TAKING A HIT'
Russian President Vladimir Putin listens to a journalist's question during a joint news conference with Hungary's Prime Minister Viktor Orban following their talks in the Kremlin in Moscow, Russia, Tuesday, Feb. 1, 2022. (AP Newsroom)
Monday's decisions from Putin are expected to hurt global markets that have already been negatively impacted by the growing tensions between the two countries. This year, tens of billions of dollars were eliminated from the value of Russian and Ukrainian assets, Reuters reported.
"It is probably an understatement to say that it will be an ugly day [for the markets] tomorrow," said Viktor Szabo, an emerging market portfolio manager at abrdn, a United Kingdom-based global investment company.
"I was hoping we weren't going to get here, but this is a significant step," Szabo added.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 25, 2022. REUTERS/Brendan McDermid
Analysts at the Commonwealth Bank of Australia warned that Putin's decision on the separatist regions would place a fan under the already heated tensions.
"Financial market participants now wait for a response from the United States and Europe," they added.
In the U.S., futures pointed at a 1.8% fall on the S&P 500, and a 2.5% drop on the NASDAQ, according to Reuters. The U.S. stock market was closed Monday due to Presidents Day.
Trader John Romolo works on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)
Meanwhile, U.S. Treasuries rallied due to demand for traditional safe assets.
"This step clearly increases uncertainty and thus creates further downside risk for global risk assets," said Manik Narain, head of emerging market strategy at UBS.
With the Russian markets still open during Putin's address, Moscow's stock markets plunged to its lowest level in more than a year, Reuters reported.
CLICK HERE TO READ MORE ON FOX BUSINESS
The RTS index finished down 13.2%, while the ruble-based MOEX Russian index lost 10.5%. Ruble losses also reached 3.3%.
Meanwhile, futures pointed to a 2.2% drop on Japan's Nikkei and a 3.7% drop on Germany's DAX in Europe, according to the news organization.
Fox News' Michael Lee contributed to this report