Ukraine plane crash hits global stocks | Inquirer Business

Ukraine plane crash hits global stocks

/ 08:05 PM July 18, 2014

A piece of wreckage of the Malaysia Airlines flight MH17 is pictured on July 18, 2014 in Shaktarsk, the day after it crashed. Flight MH17 from Amsterdam to Kuala Lumpur, which US officials believe was hit by a surface-to-air missile over Ukraine. AFP

LONDON – Global stock markets slid on Friday after the crash of a Malaysian Airlines jet which killed 298 people over rebel-held eastern Ukraine, amid signs it was hit by a missile.

Russian shares and the ruble sank, as the disaster dramatically raised tensions between the Kremlin and the West.


The investment climate was already heavily clouded by broadened US and EU sanctions linked to Ukraine.

Sentiment was also rocked as Israel launched a ground invasion of Gaza, with tanks and warplanes sweeping into the area in a bid to stop rocket fire.


The heightened geopolitical tensions sent traders fleeing risky assets such as equities and into safer investments like gold, US bonds and the yen.

European equity markets, which had already fallen late on Thursday as news of the crash broke, extended losses in late morning Friday deals.

London’s benchmark FTSE 100 sank 0.63 percent to 6,696.85 points, despite gains for drugmaker Shire Pharmaceuticals which agreed to a $54-billion takeover from US giant AbbVie.

Frankfurt’s DAX 30 index shed 0.83 percent to 9,672.96 points and the Paris CAC 40 lost 0.37 percent to 4,300.13. Milan stocks dropped 0.42 percent and Madrid decreased by 0.94 percent.

The euro meanwhile hit a February low against the safe-haven Japanese currency at 136.71 yen.

“Thursday’s tragic Malaysian Airlines plane crash has spooked financial markets as tension increased between Russia, Ukraine and the West,” said Laith Khalaf, head of corporate research at brokerage Hargreaves Lansdown.

“Geopolitical tension was also elevated as Israel launched a ground offensive into Gaza.”


He added: “Investors fled shares for the perceived safe haven of US government bonds and gold, while the price of oil also climbed.”

IMF warning on asset prices

Meanwhile, the IMF said that the Ukrainian economy was being unexpectedly badly damaged by the crisis, and said it now expected the economy to shrink by 6.5 percent this year instead of 5.0 percent.

In Paris, the head of the International Monetary Fund, Christine Lagarde, warned that European asset markets were perhaps too high relative to fundamental economic indicators, and also said that unduly low inflation could badly damage European growth..

In Asia, markets mostly fell after the disaster sparked geopolitical tensions.

Hong Kong dropped 0.28 percent, Tokyo sank 1.0 percent and Seoul slid 0.07 percent, while Sydney ended 0.17 percent higher.

Airline stocks in Asia retreated, led by a slump in already under-pressure Malaysia Airlines as the company faced up to its second major disaster in four months.

Shares in Malaysia Airlines tumbled by as much as 17.8 percent on the news, which comes months after Flight MH370 went missing with hundreds on board in a remote part of the Indian Ocean.

In Moscow, the ruble-denominated Micex stock index fell by 1.67 percent, and the dollar-based RTS index was down 2.23 percent.

The ruble meanwhile fell to 35.1 to the dollar and to 47.5 to the euro.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, malaysia plane crash, World stocks
For feedback, complaints, or inquiries, contact us.

Subscribe to our business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2022 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.