INSUBCONTINENT EXCLUSIVE:
More pain ahead for global risk assets this week on heightened volatility.More pain ahead for global risk assets this week on heightened
volatility expected after Russian President Vladimir Putin put nuclear-armed forces on high alert on Sunday.Global stocks started Monday in
the red, with an increased flight to safety trades boosting demand for sovereign debt along with the dollar and yen, while the euro sank and
the Russian rouble fell.Enhanced Western sanctions on Russia in response to Mr Putins most significant assault on a European state since
World War Two for the fourth straight day has led to risk-aversion and caution."We had a deluge of very negative information over the
My sense is theres not going to be much-staying power behind this particular move (in Asia-Pacific stocks), considering were talking about
financial stability risks, and sprinkle over that the threat of nuclear war," Kyle Rodda, a market analyst at IG Australia, told
Reuters."Volatility is heightened," he said
"Price action is incredibly choppy," he added."Market sentiment is still likely to be dominated by the events surrounding the Russia-Ukraine
conflict and wont be helped by Russia putting its nuclear forces on high alert," said Robert Carnell, Regional Head of Research for
Asia-Pacific at ING.Crude oil prices jumped on the ramp-up in tensions heightened fears that oil supplies from the worlds second-largest
producer could be disrupted.While bargain hurting trades were expected, the risk is that flight to safety trades will gain prominence this
week.Indeed, that was reflected in demand for gold, which rose over 1% and was set for its best monthly gain in nine.Gold is often used as a
hedge against inflation and as a means of preserving wealth during times of financial and political uncertainty."COMEX gold traded about 1%
higher near $1912/oz after a modest decline last week
Gold has edged up on safe-haven buying as western countries ratcheted sanctions on Russia while there is uncertainty about a major
Adding support to prices, the Bank of Russia said it would start purchasing gold again," said Ravindra Rao, Head Commodity Research at Kotak
Securities."However, safe-haven buying has also pushed the US dollar index higher, and this has kept a check on gains in gold
Gold may remain volatile as the market reacts to Russia-Ukraine development; however, the general bias may be on the upside until there are
clear signs of de-escalation in tensions," he added.Domestic bourses, too, started the week in the red.Indeed the BSE Sensex Index tanked
over 1,000 points, while the Nifty index traded below 16,400.
