(MENAFN- AFP) Global stocks mostly sank Monday, as fears of a conflict between Ukraine and Russia sent investors fleeing to safe-haven assets like gold and the yen, while oil prices soared.In morning European deals, London's benchmark FTSE 100 index fell 1.14 percent to 6,732.29 points, and in Paris the CAC 40 dropped 1.76 percent to 4,330.46 points.Frankfurt's DAX 30 lost more than 2.50 percent at one stage but later stood at 9,476.88 points, down 2.23 percent from Friday's closing level.Russian stocks also plunged and the ruble hit historic lows against both the dollar and euro, forcing the central bank to announce a surprise rise in its main interest rate.Safe-haven assets were in demand, with gold surging to a four-month peak $1,350.37 per ounce, the highest level since late October.German 10-year bond yields fell to 1.569 percent from 1.624 percent on Friday, and the dollar sank to 101.25 yen as investors turned to the Japanese currency.Pro-Kremlin forces are in effective control of the predominantly Russian-speaking Crimean peninsula, as President Vladimir Putin on Saturday won parliamentary green light to send troops to the flashpoint region in the southeast of Ukraine.
Leaders of the G7 industrial powers on Sunday condemned Russia's "clear violation" of Ukraine's sovereignty, while US Secretary of State John Kerry bluntly warned that Moscow risked losing its G8 seat over its "brazen act of aggression" in the former Soviet state.- Stocks 'hammered' by Ukraine -"Rising tensions between Russia and the West has set investors on a war footing ... with stocks being hammered," said Mike McCudden, head of derivatives at online broker Interactive Investor.Asian equities mostly fell on Monday, with Hong Kong tumbling 1.47 percent, Tokyo down 1.27 percent and Sydney shedding 0.38 percent."The Crimean reaction to the ousting of the Ukrainian government, the Russian response and the counter-response from the US/Europe, are the focus for markets," said Kit Juckes, head of currency strategy at Societe Generale. "The weekend's events will be followed by a lot of uncertainty and further risk aversion as a diplomatic solution is sought."Russia's central bank meanwhile hiked its main interest rate to 7.0 percent from 5.50 percent in a clear bid to support the plunging ruble and stem an already alarming capital flight amid the soaring tensions."The decision by Russia's central bank to raise interest rates ... is a clear attempt to stem outflows of capital from financial markets following the escalation of the crisis in Ukraine over the weekend," said Neil Shearing, emerging markets economist at Capital Economics in London. "It goes without saying that the extent to which this is successful will depend largely on political rather than economic developments."- Oil market jumps higher -With Russia also a huge supplier of oil to European nations, the price of both main crude contracts also spiked.New York's main contract, West Texas Intermediate for April delivery, gained $1.36 to $103.94, and Brent North Sea crude for April jumped $1.69 to $110.76 in morning London deals."The weekend's headlines have sent traders heading for their bunkers," said Capital Spreads dealer Jonathan Sudaria."Russia's incursion into the Crimea over the weekend has escalated the situation," he added.On the upside in Asia, Chinese shares finished 0.92 percent higher on hopes for positive policies at the annual meeting of the country's legislature, which begins Wednesday.However, there were renewed worries about the health of China's economy after Beijing said its official purchasing managers' index (PMI) of manufacturing activity fell to an eight-month low of 50.2 last month.The figure represents the third straight drop following a reading of 50.5 in January, 51.0 in December and 51.4 in November. A figure above 50 indicates expansion while one below shows contraction.
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