Volkswagen AG and the heirs of Beetle designer Ferdinand Porsche, the company’s largest shareholder, said on Tuesday they are in advanced talks that could lead to the initial public offering of the iconic Porsche AG sports-car maker. The German auto maker said it had worked out a framework agreement with its biggest shareholder, Porsche Automobil Holding SE, that still requires formal approval of both companies and their supervisory boards. VW shares jumped as much as 10% on the news, closing the day’s trading 7% higher at 187.94 euros, equivalent to $213.19, in a session that was otherwise marked by nervous trading following Russia’s decision to send troops into eastern Ukraine. A listing would provide VW with fresh cash to fund its aggressive push into electric vehicles, the development of new technology such as self-driving cars and the creation of a new business building batteries for its EVs. The discussions highlight how auto makers are looking to secure the capital to finance the auto industry’s most far-reaching transformation in a century.

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The Swiss stock market recovered somewhat from the previous day's losses at the end of trading on Tuesday. The recent escalation of the Ukraine crisis did not weigh further for the time being. The SMI gained 0.6 per cent to 11,959 points. Among the 20 SMI stocks, there were 13 price gainers and six price losers; the Swiss Life share closed unchanged. 46.73 (previously: 37.32) million shares were traded. No uniform pattern was discernible. Among the price gainers were cyclicals such as ABB (+0.6%), Geberit (+0.8%) and Sika (+2.2%). However, Givaudan (+1.5%) and Swisscom (+0.3%), which are considered defensive, were also bought. Logitech, one of only two gainers in the SMI on Monday, now gained another 0.4%. Index heavyweight Nestle, also sought after on Monday due to its defensive nature, held its ground. Recovery attempts in Credit Suisse fizzled out, the shares closed 0.3 per cent lower.

European equity indices closed unchanged on Tuesday as investors limited action after the Ukrainian crisis escalated further. The Stoxx Europe 600 index gained 0.1% to 455.1 points. In Paris, the CAC 40 and the SBF 120 finished at the balance. In Frankfurt, the DAX 40 gave up 0.3% while the FTSE 100 in London gained 0.2%. In Moscow, the RTS index rose 1.6%, after losing 13.2% on Monday. Ukrainian President Volodymyr Zelensky urged calm as Russian troops poured into Ukraine’s eastern Donbas region and Western nations announced measures to punish Moscow for recognizing two Russian-controlled statelets there as independent, signaling the potential rising economic price on Russia for further aggression. Germany said it halted moves to open the Nord Stream 2 pipeline that would allow Russia to bypass Ukraine in exporting natural gas to Europe. HSBC Holdings PLC reported its highest annual net profit since 2018 and said rising interest rates were likely to boost future returns, even as the banking giant took a charge against potential fallout from the stress in China’s property market. Scandinavian airline SAS AB on Tuesday outlined plans for a full transformation of the company as it cautioned that without fundamental change it will soon run out of cash. SAS said the plan will encompass a full transformation of its business, including its network, fleet, labor agreements and other cost structures that among other things will see annual cost cuts of 7.5 billion Swedish kronor ($799 million), rightsizing the fleet including refocusing its long-haul business, investing in fuel-efficient aircraft and raising new capital. The figures follow a series of strong results for the London-based lender, in which it has cut its stockpile of provisions against pandemic-related bad loans, reinstated dividends and introduced a $2 billion buyback.

Stocks dropped in a volatile trading session Tuesday that pushed the S&P 500 into correction territory as tensions in Eastern Europe escalated. The broad stock market index closed down 1%, hitting its lowest level in more than four months, as investors digested the ramifications of Russia's deployment of soldiers into Ukraine's eastern Donbas region. The S&P 500 declined 44.11 points to 4304.76, leaving the index down more than 10% from its Jan. 3 high and marking its first correction since the onset of the Covid-19 pandemic in February 2020. The Dow Jones Industrial Average ended the session down 482.57 points, or 1.4%, to 33596.61, while the Nasdaq Composite, which suffered a correction in January, declined 166.55 points, or 1.2%, to 13381.52. The Dow is off 8.7% from its January record, and the Nasdaq is 17% below November's high. Investors said the situation remains too fluid to say the selling is done and warned that more sessions could play out like Tuesday. Macy’s Inc. has opted against separating its e-commerce business from its bricks-and-mortar stores amid calls from an activist investor to increase shareholder returns. The department-store chain, which posted strong sales and earnings for the holiday quarter, said it is entering 2022 a much stronger company than it was before the pandemic. Hedge fund Standard General LP said it has struck a deal valued at $5.4 billion to buy TV broadcaster Tegna Inc., ending years of takeover talks. Standard General will pay $24 in cash for each share outstanding of Tegna, representing a 39% premium to the stock’s closing price on Sept. 14, before news reports of a possible offer pushed shares higher. The companies valued the deal at $8.6 billion, including debt.

After the heavy losses of the previous day, the stock markets in East Asia and Australia are showing gains on Wednesday. In Japan, the markets remain closed for the emperor's birthday. As long as there is no "major" war, a stabilisation of the stock exchanges is conceivable, they say. In South Korea, the Kospi rises by 0.5 per cent. On the Chinese stock markets, Hong Kong is up 0.9 per cent and Shanghai 0.7 per cent. In the Chinese market, Beijing's regulation of the technology sector remains in focus.

Two and 10-year U.S. Treasury yields rose as the market reacted to Russia's deployment of troops in pro-Russian regions of Ukraine. Investors remain wary of the threat of geopolitical conflict in Eastern Europe.

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