It may have been a short-lived uprising, but Yevgeny Prigozhin’s attempt to seize power from Russia’s military leadership with his private paramilitary group Wagner has shaken European markets, nonetheless.
The Ruble fell to 14-month lows and Goldman Sachs (NYSE:GS) raised the alarm on fresh threats to the oil market, although the immediate effects are likely to be muted.
The tension appears to have died down following negotiations facilitated by Belarus but the investment bank points to Wagner’s influence over regions important to oil and gas supply, including the Black Sea, Libya, Mali and Sudan – further conflict could materially restrict supply from these areas.
While Wagner and its leader have ostensibly received amnesty for their attempted rebellion, the fate of Prigozhin and his 25,000 well-armed, veteran soldiers is still uncertain.
The continent-wide FTSEurofirst 300 subsequently marked its sixth consecutive session in the red, shedding 0.1% in its longest losing streak since October last year.
The health care (-1.1%) and food sectors (-0.7%) underperformed, while the energy (+0.8%), miners (+0.8%), and chemicals (+0.9%) sectors gained ground.
In Germany, the Ifo business climate index fell from 91.5 in May to 88.5 in June, below the survey estimate of 90.7.
Meanwhile, the UK's FTSE 100 index also slid 0.1%, reaching three-month lows.
US tech, leisure and defence stocks slide
Declines in megacap growth stocks led the US markets down overnight, as the US Federal Reserve signalled high interest rates will be here to stay for some time yet.
Profit-taking pushed Nvidia down 3.7%, Meta 3.6% and Microsoft (NASDAQ:MSFT) 1.9%. Alphabet (NASDAQ:GOOGL) also suffered, shedding 2.2% as UBS downgraded the stock to “neutral”.
Tesla (NASDAQ:TSLA) suffered a similar fate at the hands of Goldman Sachs, shedding a painful 6.1% after they were also demoted to “neutral” status on fears of incoming pricing headwinds.
The damage wasn’t limited to tech stocks, however, cruise line Carnival (NYSE:CCL) shed 7.6% after third-quarter earnings were revealed to be below market expectations, and defence firms Lockheed Martin (NYSE:LMT) (-1.4%) and Northrop Grumman (NYSE:NOC) (-1.3%) were victims of Prigozhin’s power play in Russia.
On the other hand, luxury electric car manufacturer Lucid Group (NASDAQ:LCID) gained 1.5% to its share price on a deal with Aston Martin and PacWest Bancorp gained 4% on news private equity firm Ares Management had acquired a US$3.5 billion specialty finance loan portfolio from the lender.
Overall, the Dow fell 13 points, the S&P 500 dropped 0.5% and the Nasdaq felt the pain with a 157-point or 1.2% drop to the index.
Currencies and commodities
In currency markets, the performance against the US dollar varied during European and US trade.
The Euro rose from US$1.0886 to US$1.0919, closing near US$1.0900 at the end of US trading.
The Australian dollar, on the other hand, eased from US66.83 cents to US66.67 cents, hovering around US66.75 cents by the end of US trading.
The Japanese yen also experienced a decline from 142.96 yen per US dollar to JPY143.68, nearing JPY143.50 at the close of US trading.
Global oil prices inched higher as investors balanced concerns over muted global demand growth with potential supply disruptions from political instability in Russia.
Brent crude rose by US$0.33 or 0.4% to US$74.18 a barrel, while US Nymex crude price added US$0.21 or 0.3% to reach US$69.37 a barrel.
Base metal prices fell on Monday, mainly due to ongoing disappointment in global macroeconomic data.
Copper futures experienced a 0.5% dip and aluminium futures saw a decrease of 0.9%.
Conversely, the price of gold futures rose by US$4.20 or 0.2% to US$1,933.80 an ounce, with spot gold trading near US$1,923 an ounce at the end of US trading.
Iron ore futures shed US $0.19 or 0.2% to US$112.46 a tonne as Chinese mills continued to cut steel prices.
This week in Australia, we’ll see the latest data on consumer confidence, Collins Foods is set to release earnings results, and CSR will host an annual general meeting as shares of Ricegrowers trade ex-dividend.