Russia's overnight assault on Ukraine triggered a surge of calls Thursday for Western allies to completely cut Russia off from the global financial system, but fear of collateral damage is quashing the idea for now. U.K. Prime Minister Boris Johnson, at a virtual meeting of leaders from the Group of Seven largest economies, advocated disconnecting Russia from Swift, the financial-messaging infrastructure that links the world's banks. He joined a chorus of other senior officials, including Ukraine's top officials, the foreign ministers of Estonia, Latvia and Lithuania, and senior U.S. lawmakers. President Biden joined other allies including Germany and Italy in ruling out the move -- at least for now. Instead, the U.S. rolled out fresh sanctions on Russian banks, including two of the country's biggest. Those actions hit 80% of the banking sector, action the U.S. says will cause equivalent pain. EU leaders on Thursday night agreed to measures that would make it harder for Russians to come to the bloc by scrapping a visa facilitation the country has until now enjoyed. They also agreed to a broad export ban on Russia's aviation sector, including planes, helicopters, spare parts and maintenance which could over time seriously degrade the Russian aviation sector, officials said.

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The Russian invasion of Ukraine also led to a wave of selling on the Swiss stock market on Thursday. The SMI lost 2.3 per cent to 11,672 points. Of the 20 SMI stocks, 18 recorded price losses. The only gainers were Givaudan (+1.9 per cent) and Lonza (+0.7 per cent). 61.06 (previously: 33.48) million shares were traded. The losses were spread across all sectors, but banks were particularly affected - on the one hand because of fears of an economic slump as a result of the conflict, and on the other because of the threat of Russia's exclusion from the SWIFT payment network as part of further sanctions. Credit Suisse fell by 4.5 percent and UBS by 8.6 percent. The conflict is also likely to hit the luxury goods industry hard. Russia and Ukraine account for only 4 to 5 per cent of global demand, Bernstein noted. But because of the marked inequality of income and wealth in these countries, high-priced products would be sold there. Richemont, with its jewellery brand Cartier, will feel the impact, Bernstein said. Richemont was also among the biggest losers, down 6.6 per cent. Among the cyclicals, Holcim fell 4.3 per cent. ABB, Geberit and Sika fell by 1.9 to 3.4 per cent.

European stock indices fell on Thursday as oil prices rose above $100 a barrel for the first time since 2014 after Russian President Vladimir Putin launched a military offensive in Ukraine, a scenario that financial markets had feared. The Stoxx Europe 600 index lost 3.3% to 438.9 points. In Paris, the CAC 40 and the SBF 120 lost 3.8% and 3.7%, respectively. In Frankfurt, the DAX 40 was down 3.9%, while the FTSE 100 in London gave up 3.8%. In Moscow, the RTS index plunged 38.3%. Rolls-Royce Holdings PLC on Thursday reported a narrowed pretax loss for 2021 and said that Chief Executive Officer Warren East will be stepping down at the end of this year after almost eight years in the role. The British aerospace and defense company added that it expects to generate modestly positive free cash flow this year, which will be seasonally weighted toward the second half. Cash outflow for the year was 1.44 billion pounds ($1.95 billion), having restored positive free cash flow in the third quarter. This compares with an outflow of GBP4.19 billion in 2020. Centrica PLC on Thursday reported a significantly improved profit for 2021 and said that it should be in a position to restart its dividend soon. The U.K. energy company, which owns British Gas, made a net profit of 1.21 billion pounds ($1.64 billion) last year up from GBP41 million in 2020, when the business was hurt by the Covid-19 pandemic and low energy prices.

U.S. stocks staged a furious comeback Thursday as investors piled into growth and technology stocks in the wake of Russia's invasion of Ukraine. Stocks fell in the aftermath of the attacks on cities across Ukraine, while oil, gold and government notes rose. Investor optimism grew, however, after President Biden in an afternoon address announced new sanctions on Russian elites, state-owned enterprises and banks. The European Union later announced its own sanctions. The S&P 500 closed up 63.20 points, or 1.5%, to 4288.70. The tech-heavy Nasdaq Composite finished ahead 436.10 points, or 3.3%, to 13473.59. The Dow Jones Industrial Average gained 92.07 points, or 0.3%, to 33223.83. Budweiser brewer Anheuser-Busch InBev SA reported higher fourth-quarter sales, buoyed by drinkers returning to bars and reaching for pricier beers. The world’s largest beer company said Thursday that organic sales grew 12.1% in the last three months of 2021, aided by strong demand for products that it classes as premium and superpremium. AB InBev said such drinks, which include Michelob Ultra Pure Gold and Goose Island, now make up about a third of its revenue, up 2 percentage points from 2020. Mobile-videogame company Playtika Holding Corp. said it is exploring strategic alternatives for its business, including a possible sale, amid a recent wave of industry consolidation. Shares of Playtika rose more than 10% in after-hours trading to around $20 a share. The Israel-based developer and publisher, whose portfolio includes casino-style games such as “Caesars Slots,” “House of Fun” and “Poker Heat,” went public in January 2021 at $27 a share.

The increased volatility on the stock markets in Asia continues on Friday. After the sharp declines on Thursday, the markets are now showing some recovery. The war between Russia and Ukraine continues to dominate events. Although the West has passed comprehensive sanctions, Russia has not yet been excluded from the international payment system Swift. The recovery was led by Japan's Nikkei, which gained 1.7 per cent. In contrast, the Hong Kong stock market (-0.2 per cent) does not follow the regional trend, while Shanghai is up 0.5 per cent.

US bonds saw a steep upward trend. The yield on ten-year paper fell by 3 basis points to 1.97 per cent, but had at times given up more than 10 basis points.

Citi lowers Knorr Bremse target to EUR 92 (98) – Neutral

Dt. Bank raises Unicredit target to EUR 18.60 (17) – Buy

Dt. Bank raises Campari to Buy (Hold) – Target EUR 12.27 (12.80)

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