Market Analysis

Despite bullish stock market, appetite for riskier assets continues to drop

Share markets continue to climb in Europe on Wednesday, alongside US Future contracts, as traders digested a first batch of western sanctions towards Russia that are  less aggressive than initially expected. These measures from the US and its allies, targeting Russian banks, sovereign bonds as well as the Nord Stream 2 pipeline came like a warning shot to President Putin following his decisions to send military troops into Ukrainian “separatist held”. Despite today’s bullish market open on stocks, the overall appetite for riskier assets continues to drop everywhere as investors keep looking for safety. However, this ambient uncertainty due to rising geopolitical tensions may start benefitting some specific sectors linked to commodities such as energy. Companies like Royal Dutch Shell, BP, Chevron or Exxon which became very attractive following the recent sell-off, partly due to the prospect of more Iranian oil on the market, are likely to provide equity investors with an interesting hedging solution in the near future if tensions continue to grow in Eastern Europe.

Source: ActivTrader


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