Missile maker stocks gain as global stock markets see red on Russian invasion

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Shares of companies making missiles and military equipment soared despite a widespread tumble in global stock markets, as shockwaves from Russia’s invasion of Ukraine rippled through global markets.

Danish brewer Carlsberg and a Coca-Cola bottler closed their factories in Ukraine, and container shipping lines stopped crossings to and from Ukraine, suggesting further disruptions to global trade.

European stocks fell to their lowest level in nine months, with banks, automakers and travel agencies bearing the brunt after Russia launched an all-out invasion of Ukraine.

In a sea of ​​red, defense stocks were a bright spot, with Britain’s BAE Systems, Germany’s Rheinmetall and France’s Thales gaining between 2.7% and 4.2%.

The pan-European Stoxx-600 index fell 3.8% to its lowest level since May last year.

Germany’s Dax index fell 5.2% to its lowest level in nearly a year, and Britain’s commodity-heavy Ftse-100 fell more than 3%.

In Ireland, banks and global building products giant CRH and packaging company Smurfit Kappa, which rely on international sales, fell sharply. CRH ended down 7% and Smurfit closed down 6.75%.

Food companies are falling

However, food companies, which in the past would have been seen as providing safe havens during global tensions, have also fallen. Shares of Kerry Group and Glanbia ended down more than 4%.

In Moscow, shares of gas giant Gazprom, which supplies around a third of Germany’s fuel needs, fell 35%.

“It is undeniable that this is putting pressure on German supply chains and industrial complexes for their energy needs,” said Keith Temperton, sales trader at Forte Securities.

“We haven’t seen such a confluence of factors such as soaring commodity prices and potential stagflationary scenarios. This is the worst possible recipe for equities,” he said.

Among the companies with exposure to Russia is the British oil major BP, which has a nearly 20% stake in the country’s national oil company, Rosneft. Its shares fell 4.6%.

Danone, Nestlé and Renault also have operations in Russia.

Ukraine closed its airspace when Russian forces attacked in the early hours, leaving airline Wizz Air to attempt to evacuate its Ukraine-based crew, their families and four planes stranded in Kiev and Lviv.

Many companies exposed to Russia are now waiting for more clarity on the extent of promised Western sanctions before announcing any action.

Carlsberg suspended production at its three breweries in the country, while Coca-Cola HBC said it triggered its contingency plans, including closing its bottling plant.

Global shipping giant Maersk suspended calls in Ukraine until the end of February and closed its main office in Odessa on the Black Sea coast while Danish freight forwarder DSV announced it had closed operations in the country.

  • Reuters and Irish Examiner
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