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Image caption,
There are reports of queues outside Russian cash machines and banks
Share prices across Europe and the US fell further on Tuesday as attacks on cities in Ukraine continued.
Markets in US, Europe and UK fell amid fears about the impact of the conflict.
The West has imposed punishing sanctions against Moscow, with another raft of companies winding down Russian operations and halting investment.
With investors nervous about how Russian energy supplies could be affected, the price of Brent crude oil jumped 10% to $107 a barrel.
Frankfurt saw steeper losses, which analysts suggested could be linked to Germany’s reliance on Russian energy imports.
Having been up in early trading, the FTSE 100 turned negative amid the warnings of the consequences of Western sanctions on Moscow and signs that Russia was stepping up its invasion of Ukraine.
Russia’s currency was stable, having collapsed 30% on Monday to record lows against major currencies. One rouble was worth less than one US cent in trading on Tuesday.
The rouble’s fall cuts its buying power and hits savings of ordinary Russians. The decline was only halted when Russia’s central bank doubled interest rates to make the currency more attractive to investors.
The stock market in Moscow remained closed on Tuesday.
Analysis: Rob Young, lead presenter, BBC World Service Business
Russia’s invasion of Ukraine has investors on edge.
There is a huge amount of uncertainty about what is likely to happen next, and you can see that in the volatility on markets.
Western sanctions on Russia have caused turmoil in the global banking sector, with firms scrambling to ensure they’re not doing business with any sanctioned individual or company.
European and US asset managers who are keen to offload their Russian investments may find it difficult to do so with the Moscow stock exchange currently closed and talk that the Kremlin will prevent foreigners from selling up.
That – together with the lack of revenue from Russian customers – could mean lower profits for western companies, from energy giants to carmakers to investment funds.
Sanctions can hurt both sides, not just the sanctioned.
But many company bosses are clear – decisions are being made, not simply about money, but on moral grounds too.
The sanctions stranglehold on Moscow’s finances has hit the central bank’s access to a lot of Russia’s huge reserves of money held in the form of foreign currencies.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “This is a fast-moving situation and investors should be mindful of potential share price volatility in the short to medium term.”
Brent crude oil prices, which have jumped on fears of a cut in Russian supplies, soared more than 6% to above $104 per barrel on Tuesday despite US President Joe Biden saying he was considering tapping the vast US reserves to help mitigate potential lost output.
Petrol price movements in the UK are mainly determined by the price of crude oil, which is the raw material for fuel, and the exchange rate between the dollar and the pound, because oil is traded in dollars.
On Monday, the RAC said the average price of petrol had jumped to a record high of £1.51 a litre on Sunday, while diesel increased to £1.55.
Meanwhile, wheat prices climbed nearly 5%. Both Ukraine and Russia are major global suppliers of wheat.