The uprising in Russia could have sent shockwaves across equity and commodity markets but an apparent U-turn has meant only marginal volatility rather than a full-blown correction.
Russ Mould, investment director at AJ Bell, said: “Brent Crude had fallen by more than 4% over the past five days on fears about global economic weakness and how that would negatively impact demand. However, the oil price jumped 0.8% to $74.41 per barrel on Monday as markets contemplated a new period of uncertainty for supply.
“With more twists and turns to the Wagner mutiny than a theme park rollercoaster, markets aren’t ready to accept the drama is over, even though the rebel fighters have been stood down.
“Asian and European markets were weak on Monday, although one has to accept there were plenty of negative factors weighing on shares before the attempted coup in Russia, namely high inflation and further interest rate rises.
“China’s SSE index fell 1.5% after the renminbi hit a seven-month low against the dollar over concerns about the sustainability of the country’s post-Covid economic reopening, together with weak data on tourist spending. There are concerns over slowing growth and shrinking exports, issues that will no doubt trigger a new round of stimulus initiatives by the Chinese government.
“In the UK, the FTSE 100 fell 0.4% to 7,434, dragged down by weakness among banks and packaging companies.
“Cineworld dived 26% to 0.54p after confirming it was on track to go into administration and subsequently delist its shares from the London Stock Exchange. Neither event comes as a shock given this fits with previously announced financial restructuring plans and adheres to earlier warnings that shareholders would be left with nothing. Importantly, its cinema operating subsidiaries will continue to trade as normal.”
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