Investors regain risk appetite; The dollar and the oil parity gain after the invasion of Ukraine

  • Crude futures gain but retreat from session highs above $100
  • MSCI World Stock Index closes 0.46% lower, gold erases rally
  • Wall Street rallies, Treasury reports reduced losses

NEW YORK, Feb 24 (Reuters) – Investors rediscovered much of their appetite for riskier bets on Thursday afternoon, with the MSCI World Index ending well above its session low and the U.S. dollar getting weaker as oil futures pulled back from multi-year highs after the Russian crisis. the invasion of Ukraine and the responses of other countries.

After falling sharply earlier in the day, US Treasury yields pared most of their declines and the Russian ruble recouped much of its losses against the dollar, while safe-haven gold was in the red after falling increased to 3.5%.

While the S&P had steadily regained lost ground after hitting an intraday low, a noticeable improvement in risk appetite followed US President Joe Biden’s unveiling of new sanctions against Russia. He said the United States was working with oil producers to secure the world’s energy supply.

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While Biden insisted US forces would not fight in Ukraine, he said additional forces would be allowed into Germany. The sanctions cited concerned Russian banks and technology imports, but did not involve oil and gas or the SWIFT international banking system. Read more

Investors, who are most concerned about inflation in areas such as energy, were relieved by what the sanctions did not include, according to Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions.

“Historically speaking, whenever you have military incursions, the plan has been to sell before the incursion and once the tanks start crossing the borders, you’re supposed to buy it,” Janasiewicz said.

He noted that investors were buying assets such as tech stocks, which had been sold before the invasion.

A trader works at the Frankfurt Stock Exchange in Frankfurt, Germany February 22, 2022. REUTERS/Timm Reichert

“You’re selling your winners to buy the losers right now. That’s the rotation we’re seeing,” he said.

The MSCI gauge of stocks across the world (.MIWD00000PUS) closed down 0.46% after earlier falling more than 3% to its lowest level since March 2021.

The Dow Jones Industrial Average (.DJI) closed up 92.07 points, or 0.28%, at 33,223.83 while the S&P 500 (.SPX) gained 63.2 points, or 1.50 %, at 4,288.7 and the Nasdaq Composite (.IXIC) added 436.10 points, or 3.34%, to close at 13,473.59.

U.S. crude stood 0.77% higher at $92.81 a barrel, but well below its high of $100.54 and Brent rose 2.3% to $99.08 from its high. high of $105.79.

The dollar index rose 0.91%, with the euro down 1.01% at $1.1195. Previously, the greenback had hit a two-year high and as much as 1.62% against a basket of major currencies. XRF

The Russian ruble RUB= weakened 4.51% against the greenback to 84.96 per dollar after hitting a record low of 89.986 per dollar. Read more

Benchmark 10-year notes last rose 4/32 to 1.9651% from 1.977% late Wednesday. The 30-year bond last fell 5/32 in price to yield 2.2818%, down from 2.275%. The 2-year note last rose 2/32 to 1.5697% from 1.6%.

Spot gold was last down 0.3% at $1,902.86 an ounce after hitting $1,973.96 earlier.

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Reporting By Sinéad Carew; Editing by Kirsten Donovan and Sandra Maler

Our standards: The Thomson Reuters Trust Principles.

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