Stocks rebound, oil slips as traders weigh Russia sanctions

LONDON — Global stocks rebounded on Friday, one day after slumping as Russia invaded Ukraine, while oil declined from 2014 peaks.

In Europe, the three main indices all briefly gained over 3 per cent in afternoon trading, recovering much of the previous day's losses, as Western nations held off from imposing sanctions that would cripple critical sales of Russian oil and gas.

On Wall Street, which ended on Thursday in positive territory, the Dow rose by 0.4 per cent at the start of trading on Friday, although the tech-heavy Nasdaq Composite dipped slightly.

Asian equities mostly bounced back.

European benchmark Brent crude was down to $97.76 per barrel, having briefly soared past $105 per barrel on Thursday for the first time since 2014.

Haven investment gold firmed above $1,900 per ounce, having forged a near 1.5-year peak on Thursday.

"It's a remarkable turnaround when you consider that the invasion is still taking place and sanctions are being drawn up," said market analyst Craig Erlam at trading platform OANDA.

"With oil trading back below $100 a barrel and gas prices falling after yesterday's surge, it would appear traders are anticipating minimal disruption to Russian exports either directly as a result of the invasion or from sanctions imposed," he added.

Sanctions 'underwhelmed' 

"The latter is understandable as the proposed measures so far have underwhelmed, to say the least," said Erlam.

Western nations added to sanctions on senior Russian officials and business figures as well as Russian banks. However, they have largely spared the Russian energy sector and not cut Russia off from the SWIFT international bank transfer system.

"From our vantage point, the rally after the new sanctions were announced suggested to us that the new sanctions weren't harsh enough, as market participants seemingly took comfort in the recognition that nothing was done to restrict Russia's oil and gas exports or its access to the SWIFT financial payments system," said Patrick J. O'Hare at Briefing.com.

Such moves would have sent already high energy prices even higher, causing more pain for consumers.

"The stock market is acting as if it thinks the Russia-Ukraine situation won't become a source of hyper commodity inflation or the basis for an economically-damaging cyber war," O'Hare added.