Spooked investors appear to have hit the sell button on equities in response to the escalating crisis in Ukraine.
Over 100 points has been shaved from the FTSE 100 as political and macroeconomic uncertainties have dealt confidence a considerable blow.
At lunch the blue chip bench mark was down 112 points standing at 6,697, and Randgold Resource was the sole material riser as gold prices benefitted from a ‘safe haven’ premium.
Russia’s military has reportedly taken control of the Crimea region, a amid rising tensions which saw violent civil protests prior to the departure of Ukraine’s pro-Russia president Viktor Yanukovych last month. In response, Ukraine’s military is being mobilised.
Experts say the destabilisation of the Eastern Europe may cause those countries to fall into recession and regional currencies could collapse. Globally this could impact upon broader international growth prospects.
Oil and gas stocks are among those the most direct exposure, though rising fuel prices present something of a boon for the immediate term.
Around two thirds of EU-bound Russian gas is transported through Ukraine via pipelines, and as such a gas shortage is a real possibility.
Shell (LON:RDSB) fell 1.16% to trade at £23.00, whilst BG (LON:BG) was down 0.7% at £10.81.
Elsewhere, a few of London’s small cap oil stocks were also impacted. Russia focussed E&P Petroneft (LON:PTR) fell 15% to 5.9p, whilst Urals Energy (LON:UEN) was down 11%. Ukraine based gas junior Regal Petroleum was down 4%.
Ukraine dairy business Ukrproduct Group was down 11.9% at 31.5p, and Dragon-Ukrainian Properties and Development was 12% lower.
Elsewhere across the market profit taking has set in, with investors actively taking risk of the table and cash in after the previously strong start to 2014.