Stopping Russian gas deliveries shakes European stock markets
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The markets are facing two major shocks: the complete shutdown of the Nord Stream 1 gas pipeline by the Russian giant Gazprom and the fall of the euro. Investors fear a recession in Europe.
The beautiful summer on the markets is only a distant memory. European indices are sinking into the red. In Paris, the CAC 40 plunged 1.8% at the start of the session. It thus falls a stone’s throw from 6,000 points. Since its peak on August 16, when it climbed to nearly 6,600 points, the barometer of the Paris Stock Exchange has fallen nearly 8.5%. He thus lost most of the gains accumulated over the past two months.
The atmosphere is also gloomy on the other major European markets today: the Frankfurt Stock Exchange, where the economy is most dependent on Russian gas, fell by 2.73% and Milan fell by 2.30%.
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At the start of the week, the markets are facing two major shocks: the complete shutdown of the Nord Stream 1 gas pipeline by the Russian giant Gazprom and the plummeting of the euro, which fell on Monday for the first time in 20 years, under the $0.99 threshold.
The price of gas is soaring
With the cessation of Russian gas deliveries to Europe, “the energy battle seems to be taking on a new dimension, and approaching the worst fears we could have had about Europe’s energy supply“, explain the specialists of Banque Postale AM. For them, “the next six months, with the onset of winter in particular, will be difficult to manage. The risk of rationing cannot be excluded“. “Europe has done a very good job over the past two months maintaining high levels of gas storage and diversifying imports, but if Russia stops supplying gas, chances are we won’t be able to spend the winter without notable restrictions or rationing», Abound the analysts of the Deutsche Bank.
After approaching its historic record of 345 euros per megawatt hour on August 26, the price of European natural gas jumped again on the benchmark market, the Dutch TTF. The course took more than 22% to 262 euros per megawatt hour, after rising to 279 euros.
Euro tumble
The complete shutdown of the Nord Stream 1 gas pipeline raises fears of serious consequences for the European economy and causes the euro to fall, falling this Monday morning to 0.9878 dollars, its lowest since December 2002, the year of its implementation. traffic. The jump in gas prices and the lack of energy that is looming for this winter are undermining the budgets of consumers and businesses alike and threatens to plunge the euro zone into recession.
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