The European Commission proposed a broad new Russian sanctions package, including a ban on imports of Russian coal, slashing the access of Russian road carriers and ships into the bloc, restricting oligarchs and their families and blocking some high-tech machinery exports. The bloc has also proposed sanctioning two of President Vladimir Putin’s daughters, according to diplomats familiar with the plan, a move that would add the Russian leader’s closest family members to a growing list of individuals sanctioned in an effort to pressure Moscow over its invasion of Ukraine. The measures, which will need backing from the bloc’s 27 member states, come after reports this weekend from Ukraine of war crimes allegations against Russian forces. The proposed ban on Russian coal would be the first time the European Union has agreed to block one of Russia’s main energy exports. EU capitals remain divided on whether to impose a ban on Russian oil and natural gas imports, although the momentum behind introducing a phased embargo of Russian oil supplies is gathering, according to diplomats. Announcing the proposed sanctions, European Commission President Ursula von der Leyen said officials are working on options for reducing oil imports from Russia, although these won’t be part of the current package. Ms. von der Leyen said the coal import ban will deprive Russia of annual revenue of 4 billion euros, equivalent to $4.4 billion.

The Swiss stock market demonstrated resilience on Tuesday after the previous day's strong gain and defended its profits. At the end of the day, the SMI was up 0.3 per cent to 12,377 points. Among the 20 SMI stocks, there were 13 price gainers and seven price losers. 37.96 (Monday: 31.16) million shares were traded. In the absence of news, the daily gainers were Givaudan (+2.1%) ahead of Richemont (+1.7%). UBS ranked at the bottom with a minus of 4.0 per cent and the share of rival Credit Suisse also lost significantly by 2.2 per cent. Across Europe, bank shares were among the major laggards. ABB did not benefit from the company's partnership with Samsung Electronics regarding its smart building technology business. Logitech shares, which were over 5 per cent firmer on Monday following a buy recommendation, saw slight profit taking and slipped 1.3 per cent.

European stocks were mixed, while shares in chemical and utility firms gained. The Russia-Ukraine war, which has roiled equity and commodity markets since February, remained in focus. Allegations of war crimes in areas formerly occupied by Russia came to the fore over the weekend, renewing the debate - especially in Europe - of further sanctions on Russian energy. The Stoxx Europe 600 index gained 0.2% to 463.1 points. In Paris, the CAC 40 and the SBF 120 fell by 1.3% each, penalised by the decline in the banking sector. In Frankfurt, the DAX 40 was down 0.7% while in London, the FTSE 100 rose 0.7%. The banking sector weighed on European indices. In Paris Société Générale fell 5.6%, Crédit Agricole lost 5% and BNP Paribas gave up 4.6%. Deutsche Bank gave up 0.3% in Frankfurt, while UniCredit dropped 2.8% in Milan. Casino (-0.4%) announced that it had sold its remaining stake in shopping centre operator Mercialys for €87m. Dassault Aviation (+1.2%) is reportedly discussing the sale of 12 Rafale fighter jets to Serbia, La Tribune reported on Tuesday. Sodexo fell 1.5% to 64.32 euros. Deutsche Bank lowered its target price for the stock from 100 to 93 euros while confirming its buy recommendation. Wind turbine manufacturer Vestas jumped 8.6% in Copenhagen, supported by a recommendation from Credit Suisse, which raised its advice to "outperform" and its price target to DKK 250.

U.S. stock indexes declined Tuesday as investors weighed the prospect of more assertive actions by the Federal Reserve to curb inflation. The S&P 500 fell 57.52 points, or 1.3%, to 4525.12, a day after the indexes were pulled higher by rallying technology stocks. The tech-heavy Nasdaq Composite lost 328.39 points, or 2.3%, to 14204.17. The Dow Jones Industrial Average slipped 280.70 points, or 0.8%, to 34641.18. Before Tuesday’s selloff, the Nasdaq had climbed more than 15% since touching a 52-week low on March 14. The index is still off about 12% from November’s record. Reports of Russian atrocities inflicted on Ukrainian civilians in occupied areas have shocked Western governments, which have called for additional sanctions on Russia. Sanctions have already sent oil prices soaring above $100 a barrel and lifted prices for several other commodities. That has heaped pressure on economies already facing multidecade high inflation. Twitter shares rose $1.01, or 2%, to $50.98 after the company said it would appoint Tesla Chief Executive Elon Musk to its board. The increase added to a 27% gain Monday that came after Mr. Musk disclosed he held a 9.2% stake in the social-media company. Many other tech-related stocks fell, with information-technology among the weakest groups in the S&P 500. Applied Materials dropped $7.73, or 6%, to $121.71. Teradyne dropped $7.03, or 5.9%, to $111.91. General Motors (-4.1%) and Honda announced that they will jointly develop a range of affordable electric cars to bring a currently expensive technology to the masses. Amazon (-2.6%) signed agreements for up to 83 launches to deploy most of its "Project Kuiper" satellites. Oil company Exxon Mobil (+1.7%) announced in a regulatory filing on Monday evening that its first-quarter profit could exceed $9 billion because of higher crude prices. UnitedHealth (+1.6%) and Change Healthcare (+7.4%) announced on Tuesday that they had extended their merger agreement until 31 December due to the US Department of Justice's proceedings to block the deal.

In Asia, major indexes broadly closed with losses. China reported more than 20,000 new infections for the first time since the start of the pandemic. In mainland China, where trading is taking place for the first time this week after a two-day holiday break, the Shanghai composite is down 0.2 per cent. In Hong Kong, the drop is more significant at 1.4 per cent due to the many technology stocks listed there. The Kospi also fell in Seoul (-0.9 per cent). The Nikkei-225 in Tokyo recorded the most significant drop in the region, declining by 1.8 per cent to 27,286 points. Shares in Denso and Advantest slip 5.3 and 3.9 per cent respectively. In Hong Kong, Tencent shares are down 1.9 per cent. Financial stocks, on the other hand, benefited from rising interest rates. Resona Holdings and Dai-ichi Life Holdings gained up to 2.0 per cent in Tokyo.

Two- and 10-year Treasury yields soared to their highest levels since March and April of 2019 after Federal Reserve Gov. Lael Brainard said she expects the central bank’s almost $9 trillion balance sheet to “shrink considerably more rapidly” than in the previous recovery. The 10-year Treasury note jumped 15 basis points to 2.554%. Falling back below the 10-year yield after several days of yield curve inversion, the 2-year yield rose 10 basis points on Tuesday to 2.334%.

Jefferies raises Glaxo target to 2,100 (1,925) p - Buy
Citi lifts RWE target to EUR 45 (38) - Buy
Berenberg lowers Vodafone to Hold (Buy) - Target 145 (150) p

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