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Economy

French markets plunge amid Ukraine fears

media The rising threat of war between Ukraine and Russia sent investors scurrying for relative safety, gold bars in Munich, 3 February 2014. Reuters/Michael Dalder

French stocks dipped 2.51 per cent on Monday as fears of conflict between Ukraine and Russia sent investors fleeing to safe assets like gold or the Yen.

The Paris CAC 40 was not the only market diving. At midday,  London's FTSE index lost 1.90 per cent and Frankfurt's DAX 30 fell from 3 per cent.

But Moscow of course, was the worst-hit market, with Russian stocks plummeting by 13 per cent.

As the Ukraine crisis escalated, investors tried to rebalance their portfolio away from stocks.

Some investors turned to what is paradoxically a safe asset in times of crisis: the French debt.

"The weekend's events will be followed by a lot of uncertainty and further risk aversion as a diplomatic solution is sought" said the head of currency strategy at the French bank, Société Générale.

With Russia also a huge supplier of oil to European countries, the price of oil also spiked.

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