A year ago, Ukraine was about as exciting as Uzbekistan. Now, it’s a market driver. The Market Vectors Russia exchange traded fund (RSX) is on its way to the teens unless rivals Vladimir Putin and Petro Poroshenko, Ukraine’s president, can hug it out mighty quick. Seeing how this is an unlikely scenario in the near term, markets are betting on the bear case.
Risk aversion continues to consume global financial markets as the equity weakness in Europe has extended to the U.S. The S&P 500 and Dow dropped over 1.3% on Wednesday. The main Russia ETF fell 1.87%. Not surprisingly, the negative news flow out of Ukraine continues to hurt Russian and European equities as investors cherry pick which countries and companies will be hardest hit by sanctions.
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