Shares in companies making missiles and military equipment climbed despite a widespread slump in global stock markets, as the shock waves from the Russian invasion of Ukraine spread across global markets.
Danish brewer Carlsberg and a Coca-Cola bottler shut their plants in Ukraine, and shipping container lines stopped sailings to and from Ukraine, suggesting further disruptions to world trade.
European stocks plummeted to nine-month lows, with banks, carmakers, and travel companies bearing the brunt after Russia launched an all-out invasion of Ukraine.
In a sea of red, defence stocks were a bright spot, with UK’s BAE Systems, Germany’s Rheinmetall, and France’s Thales gaining between 2.7% and 4.2%.
The pan-European Stoxx-600 index tumbled 3.8% and hit its lowest since May last year.
The German Dax index sank 5.2% to its lowest in nearly a year, and the UK’s commodity-heavy Ftse-100 dropped by over 3%.
In Ireland, the banks and global building products giant CRH and packaging firm Smurfit Kappa, which rely on international sales, fell sharply. CRH ended 7% lower and Smurfit closed 6.75% down.
Food firms, which in the past would have been seen as offering havens during global tensions, also fell, however. Kerry Group and Glanbia shares ended over 4% lower.
In Moscow, shares in gas giant Gazprom, which supplies about a third of all Germany’s fuel needs, fell 35%.
“There’s no denying that it puts pressure on supply chains and the likes of the German industrial complex for their energy needs,” said Keith Temperton, sales trader at Forte Securities.
“We haven’t seen such a confluence of factors like sky-rocketing commodity prices and potential stagflationary scenarios. It’s the worst possible recipe for stocks,” he said.
Firms with exposure to Russia include the British oil major BP, which owns a stake of almost 20% in the country’s national oil company Rosneft. Its shares fell 4.6%.
Danone, Nestle, and Renault also have operations in Russia.
Ukraine closed its airspace as Russian forces attacked in the early hours, leaving airline Wizz Air trying to evacuate its Ukrainian-based crew, their families, and four planes stuck in Kyiv and Lviv.
Many companies with exposure to Russia are now waiting for more clarity about how sweeping promised Western sanctions will be before announcing any action.
Carlsberg suspended production at all three of its breweries in the country, while Coca-Cola HBC said it had triggered its contingency plans which included shutting its bottling plant.
Global shipping giant Maersk halted port calls in Ukraine until the end of February and closed its main office in Odessa on the Black Sea coast while Danish freight forwarder DSV said it had shut its operations in the country.
- Reuters and Irish Examiner
