Volkswacht Bodensee - European equities slide, as oil drops off peaks

The euro sank to the lowest level against the pound since mid-2016, as the start of a second week in fighting triggered concerns over the eurozone's economic recovery from the coronavirus pandemic.

In commodities trading, Brent North Sea crude reached $119.84 per barrel, the highest level since early 2012, while WTI touched $116.57, last seen in 2008 -- but both gave up ground mid-session as their rally faded.

Europe's reference Dutch TTF gas price earlier surged to a record 199.99 euros per megawatt hour, before heading back under 170 euros in mid-afternoon trade.

Russia is a major oil and gas producer.

"Stock markets are back in the red again on Thursday, as we await further talks between delegations from Ukraine and Russia," said OANDA analyst Craig Erlam.

"Any rebounds we're seeing in risk appetite appear more driven by hope than reality and as we're seeing today, they're not lasting," added Erlam. With more sanctions on Russia in the offing, "I struggle to see market sentiment dramatically improving for the foreseeable future."

ActivTrades senior analyst Ricardo Evangelista noted supply side pressures could "soon extend to gas and oil exports and exacerbate the tightness felt in global markets."

Surging oil prices are playing a major role in sending global inflation to the highest levels in decades, forcing central banks to hike interest rates but the added fear of where the conflict in Ukraine is headed is futher battering sentiment.

Amid the volatility, "the focus remains firmly fixated on the situation in Ukraine and nothing else matters, it seems, for the markets," said Fawad Razaqzada, market analyst with ThinkMarkets.

Federal Reserve chief Jerome Powell on Wednesday said he was in favour of a moderate pace of rate increases, with a 25-basis-point lift this month as "near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain".

The comments soothed concerns that officials could announce an aggressive 50-basis-point lift.

The issue of Fed tightening has cast a pall over stock markets for months, bringing a near two-year rally to an abrupt end, with Ukraine compounding matters.

Analysts warned of market volatility for some time as fighting in Ukraine sent other commodities produced by Russia, including aluminium, to record highs.

Bloomberg's gauge of raw materials is closing in on the biggest weekly gain since at least 1960, the financial data provider said Thursday.

Widespread international sanctions against Russia threaten to put its economy on its knees, while Moody's and Fitch have slashed the country's credit rating to junk.

It comes as Russian companies are removed from international stock markets.

Elsewhere, the European single currency on Thursday slid at one point to 82.76 pence per euro, the lowest level since Britain voted in favour of Brexit.

The eurozone remains vulnerable to energy markets volatility because of its dependency on Russian oil and gas supplies.

- Key figures around 1650 GMT -

Brent North Sea crude: DOWN 0.5 percent at $112.42 per barrel

West Texas Intermediate: DOWN 0.8 percent at $109.76 per barrel

New York - Dow: DOWN 0.6 percent at 33,685.02 points

London - FTSE 100: DOWN 2.6 percent at 7,238.85 (close)

Frankfurt - DAX: DOWN 2.2 percent at 13,698.40 (close)

Paris - CAC 40: DOWN 1.8 percent at 6,378.37 (close)

EURO STOXX 50: DOWN 1.8 percent at 3,739.53

Tokyo - Nikkei 225: UP 0.7 percent at 26,577.27 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 22,467.34 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,481.11 (close)

Euro/dollar: DOWN at $1.1046 from $1.1126 late Wednesday

Pound/dollar: DOWN at $1.3337 from $1.3405

Euro/pound: DOWN at 82.82 pence from 82.95 pence

Dollar/yen: UP at 115.60 yen from 115.51 yen

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Y.Bouchard--BTB