The Daily Observer London Desk: Reporter- Victoria Smith
Global investors yesterday scrambled to respond to the knock-on effects of Russia’s failed mutiny as the rouble sank to a 15-month low against the US dollar.
Oil and wheat commodity prices and defence industry stocks were in focus, with some big moves in early trading.
Experts were also trying to work out how events might affect inflation and interest rates.
George Lagarias, chief economist at Mazars, said: ‘Russia is very important for the global supply chain as a major energy supplier and commodities exporter.
Further instability could, in theory, add to inflationary pressures when we at least thought supply chain issues were behind us.’
Blowback: The rouble weakened to 87.23 versus the dollar before strengthening to 84.25
Russia’s invasion of Ukraine last year sent energy and food prices spiralling, accelerated a cost of living squeeze and reshaped European industry.
Yet with anxiety about growth in the world’s biggest economies – the US and China – the price of a barrel of Brent crude rose 60 cents to $74.45.
Phil Flynn, analyst at Price Futures Group, warned that Russian political instability could still worsen supply shortages.
Elsewhere, Chicago wheat futures –the global benchmark for the commodity – hit four-month highs amid concerns about the situation in Russia, a major exporter before retreating amid profit taking.
And defence industry investors marked down stocks that have made big gains since the invasion.
Shares in BAE Systems fell 2 per cent while Italy’s Leonardo and France’s Dassault fell too, as did America’s Lockheed Martin.
The rouble weakened to 87.23 versus the dollar before strengthening to 84.25.
