Global indexes took a step back yesterday as news filtered through that an airline passenger plane had crashed in the eastern region of the Ukraine.
Flight MH17, a Malaysian Airline flight going from Amsterdam to Kuala Lumpur went down around 14:15GMT after they lost contact with the plane near the Ukraine and Russian border. Of the 280 passengers and 15 crew, no survivors have been found yet. Neither side in the Ukraine conflict has accepted responsibility and US sources say the plane was shot down by a pro-Russian separatist rocket.
The markets took an immediate step back as the news hit and they are expected to contract back again today.
Almost immediately the US released a new set of sanctions on some of Russia's largest banks and energy companies which was met with reverent dismissals from the Russian President and Prime Minister. As the continued violence in the Ukraine draws more reaction from the US in form of sanctions, whether these will be an effective way to force Moscow to do more to ease the situation has yet to be seen.
Ongoing since March, the situation has never looked close to a resolution and with further intervention from the US and EU being called for none is insight. With Moscow posturing and bringing up the Cold War and the US not looking to back down it is now up to Europe to see how peace can be brokered. The EU's reluctance to enhance their round of sanctions on Moscow and real progress will need to be made using the relationships between the European leader and Mr. Putin and Mendev.
A return to a Cold War like era would do no one any benefit and it is in the best interests of all involved to get this situation calmed and a political not military resolution.
Russian markets had managed a recovery from the initial backlash a few months ago however they have reacted badly to the new sanctions. Losing over 2% yesterday the markets will be a tentative place today. Now that their major businesses will struggle to find cheap credit, many believe that their will be an exodus of Russian firms from overseas markets as they try to save their own economy. This was hinted at last time round however it never quite went that far. Should the powers that be not start talking and coming up with ideas, many people in eastern Europe could be facing a colder than normal winter.
Nikkei 225 at 15,215.71 (-1.01%) Hang Seng at 23,415.01 (-0.45%)
SSE Comp at 2,055.59 (-0.57%)
FTSE 100 at 6,738.32 (-0.68%) Dax at 9,753.88 (-1.07%)
CAC 40 at 4,316.12 (-1.21%) BEL 20 at 3,125.30 (-1.12%)
IBEX at 10,543.30 (-1.17%) Zurich SMI at 8,548.08 (-0.80%)
Dow Jones Closed at 16,976.81 (-0.94%)
NASDAQ Closed at 4,363.45 (-1.41%)
S&P 500 Closed at 1,958.12 (-1.18%)
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