Attack On Ukrainian Nuclear Power Station Hits Markets

In the early hours of Friday’s Asian trading session, news broke of a Russian attack on the Zaporizhzhia Nuclear Power Station in Ukraine. In the immediate aftermath of the report, indices once more plunged as traders flocked back to security assets.

The Zaporizhzhia Station is the largest of its type in Europe and provides as much as 20% of Ukraine’s electricity. However, the Russian attack does not just pose a threat to Ukraine’s already broken infrastructure. Ukrainian President Zelensky called on Europe to “wake up” to the prospect of a nuclear catastrophe. This is something that resonates all too poignantly for Ukrainian survivors of the 1986 Chernobyl meltdown.

The attack triggered another spell of volatility in the markets as sentiment was shaken once more. In more detail, the Nasdaq, S&P 500, and Dow Jones fell by 1.8%, 1.6%, and 1.3% respectively. Meanwhile, Japan’s Nikkei 225 tumbled over 3% and DAX 40 futures dropped over 2%. As EUR, AUD, and NZD slipped, traders crossed to safer options in USD, JPY, and gold. Conversely, oil rode its greatest weekly surge in almost two years, with Brent crude striking just short of $120 on Thursday.

Investors also remain on edge concerning the Federal Reserve’s tapering plans. Jerome Powell stated this week that is was “too early to say if Russia changes the rate path”, so traders remain pinned between inflation concerns and geopolitical conflict. With non-farm payrolls scheduled for release on Friday, market volatility is not likely to ease significantly before the weekend.