European shares fell in the first minutes of trading on Thursday. The FTSE 100 is down 2.5% in London, while the French CAC 40 is down 4% and the German DAX 30 is down 4%. Russian stocks collapsed, with the country’s main index down 45%.
US stock futures also fell. Dow futures were down 660 points, or 2%. S&P 500 and Nasdaq futures were down 2% and 2.5%, respectively.
The pain spread beyond the arrows. The Russian ruble briefly fell about 10% to a record low of 90 against the US dollar.
The unrest comes after Putin announced a military operation and CNN teams in Ukraine reported explosions.
There were reports of troops crossing the border from the north and south, and bombings in several cities, including the capital, Kiev. Ukrainian President Volodymyr Zelensky said in a moving speech that his country will defend itself.
“The world is shocked that Russia is launching a major military offensive against Ukraine,” analysts at ING wrote Thursday in a research note. They added that “financial markets are witnessing an expected flight to safety and may have to endure slower growth due to the additional rise in energy prices.”
Investors will be watching the West’s response to Russian aggression, which will likely include sanctions.
“The question then will be which Russian financial institutions are targeted by severe financial sanctions,” ING analysts said.
– Matt Egan contributed reporting.
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