😣Markets take a beating as Ukraine invasion fears rise

MARKETS
Markets take a beating as Ukraine invasion fears rise

What’s going on?
Stock markets around the world were shaken over concerns that a Russian invasion of Ukraine was becoming more likely. 
Travel companies, banks and businesses with major operations in Eastern Europe were among the hardest hit.

Why is this important?

The first two months of 2022 have been a turbulent ride in the stock market. Fears of slowing economic growth, runaway inflation and rising interest rates have seen global equities swing wildly in volatile trading sessions.

Yesterday the FTSE 100 finished 1.7% lower while the FTSE 250 fell 2.0% amidst heightened geopolitical tensions between Russia and the West. Over the weekend the US reported that a Russian invasion of neighbouring Ukraine was a the “very distinct possibility” as Russian troops continue to position themselves near the border. Russia has continued to deny that it’s planning to invade.

The crux of the disagreement is that Russia doesn’t want Ukraine to join NATO, the Western military alliance that was created to counter the Soviet Union.

Russia is a major oil and gas producer and a war could cause serious interruption to supplies. The threat of an imminent conflict saw oil prices hit a new seven-year high and European gas prices jump. 

Higher energy prices globally have already been a major reason behind the 30-year high UK inflation rate at 5.4%.

The travel sector came under pressure as the possibility of a European war would restrict flight paths in the continent. Shares in British Airways owner, IAG, fell 6%. But the biggest faller on the UK stock market was steelmaker Evraz that has mines in Russia and Ukraine, its shares dropped almost 30%.
 

RETAIL
JD Sports and Footasylum fined £5m for secret meetings

Covert meetings in car parks, hiding records from regulators, no this isn’t the plot of a spy movie but what the Competition and Markets Authority (CMA) has accused JD Sports and Footasylum of doing.

Back in 2019 the two sportswear retailers announced they would be merging but after an in-depth investigation, the competition regulator blocked the deal twice claiming that it would lead to worse outcomes for consumers.

The CMA's role is to make sure that consumers get a fair deal. It first blocked the deal in 2020, arguing that the merger would mean customers would likely face “higher prices, less choice and a worse shopping experience”.

During the investigation the companies are not allowed to share any sensitive commercial information or integrate in any way.

The CMA found that the CEOs had secretly met in car parks, caught on video, and deleted meeting records. As a result the companies were fined £5m in total. 

JD Sports has maintained its innocence saying that it “always acted honestly and in good faith in its efforts to comply” with the CMA. The bosses of the two retailers, who have known each other for over 25 years, say they met in the car park to discuss their future roles in the potential combined business and a personal matter involving a family member.