European markets underperform amid Crimea fears

AP News
Posted: Mar 24, 2014 1:01 PM

LONDON (AP) — Rising tensions in Crimea as Russian troops seize Ukrainian ships and military installations have weighed on markets, particularly in Europe, on Monday.

The military activity has stoked concerns over what Russia is planning and in particular whether it intends to make further military incursions into Ukraine. Last week, Russia formally annexed Crimea after a hastily-arranged referendum in the peninsula approved the split from Ukraine.

"Clearly traders in Europe are taking their cue from the ongoing crisis in Crimea," said Craig Erlam, market analyst at Alpari.

In Europe, the FTSE 100 index of leading British shares closed down 0.6 percent at 6,520.39 while Germany's DAX fell 1.7 percent to 9,188.77. The CAC-40 in France ended 1.4 percent lower at 4,276.34.

Europe's disappointing session dented sentiment on Wall Street, where shares were down too, despite earlier predictions of modest gains. The Dow Jones industrial average fell 0.5 percent to 16,228 while the broader S&P 500 index was 0.8 percent lower at 1,851.

With a pretty thin calendar of economic indicators during the U.S. session, trading may prove to be lackluster, with sentiment potentially influenced by developments in Crimea.

"It seems likely that the direction on Wall Street will be driven largely by factors from overseas," said Joao Monteiro, an analyst at Valutrades.

Earlier, Asian stock markets brushed aside a Chinese survey showing manufacturing continued to weaken in March and at its fastest clip in 18 months. The preliminary version of HSBC's purchasing managers' index for China dropped to 48.1 points in March from February's 48.5. Readings below 50 on the 100-point scale indicate a contraction in activity.

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Tokyo's Nikkei 225, the regional heavyweight, rose 1.8 percent to 14,475.30 after a three-day long weekend. Hong Kong's Hang Seng gained 1.9 percent to 21,846.45 and China's Shanghai Composite Index widened gains after the release of the manufacturing survey, rising 0.9 percent to 2,066.68.

Elsewhere in financial markets, the mood was fairly lackluster, with the euro down 0.1 percent at $1.3775 and the dollar flat at 102.25 yen. A barrel of benchmark crude was up 2 cents at $99.48.