By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets posted sharp
losses on Monday after tensions in Ukraine escalated over the
weekend, when Russia's President Vladimir Putin got parliamentary
approval to use armed forces in the country.
The Stoxx Europe 600 index slid 1.6% to 332.55, setting it on
track for the lowest close since mid-February.
Russia's MICEX index tanked 8.3% to 1,323.80. Meanwhile, the
ruble (USDRUB) dropped to a record low against the dollar and euro,
after Russia's central bank unexpectedly raised its interest rate
to 7% from 5.5% in response to the recent "increased volatility" in
financial markets.
In Ukraine, the UX index gave up 8.30% to 1,026.37.
The large moves came as the crisis in Ukraine deepened, with the
U.S. and its allies confronting Russia about its latest move to
occupy the country. The Western powers threatened on Sunday to
isolate Putin and punish his nation's economy, demanding Russia
withdraws forces from Ukraine's Crimean region.
U.S. Secretary of State John Kerry made plans to visit Kiev on
Tuesday to show support for the country's interim government.
In Europe, economic data were also in the spotlight. The final
euro-zone manufacturing purchasing managers index for February came
in at 53.2, better than the "flash" estimate of 53, but below
January's 54.
France's manufacturing PMI climbed to a five-month high of 49.7,
almost moving above the 50-level that separates expansion from
contraction.
The CAC 40 index traded 1.6% lower at 4,339.50. Germany's DAX 30
index slumped 2.2% to 9,480.59, and the U.K.'s FTSE 100 index
dropped 1.1% to 6,736.24.
Banks posted some of the biggest losses in indexes. Shares of
Société Générale SA gave up 4.7% in Paris, Commerzbank AG lost 3.2%
in Frankfurt, and heavyweight HSBC Holdings PLC (HSBC) fell
1.3%.
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