European stocks log first losing quarter in two years as Russia-Ukraine war rattles sentiment

LONDON — European stocks closed lower on the last trading day of March, a month marked by global geopolitical and economic uncertainty after Russia’s invasion of Ukraine.

The pan-European Stoxx 600 closed lower by 0.7% on Thursday, but eked out a monthly gain of 0.8% for March. The European blue-chip index ended the first quarter of 2022 more than 6.3% lower, its worst three-month period in two years.

In terms of individual share price movement, British advertising giant S4 Capital plunged more than 6% after pulling the publication of its results due to an auditing delay. At the top of the Stoxx 600, British wealth manager Quilter gained 2.2%.

Geopolitical uncertainty and concerns over rising inflation have dominated market sentiment in March. Both European and U.S. markets traded lower Wednesday following disappointment after talks between Russia and Ukraine, aimed at finding a solution to the conflict, again appeared to make little progress.

Oil prices fell sharply during Asia trading hours overnight and during morning trade in Europe. International benchmark Brent crude futures were last down 4.8% to just over $108 per barrel. U.S. crude futures dropped around 4.2% to just under $103 per barrel.

U.S. President Joe Biden’s administration plans to release 1 million barrels of oil per day from the strategic petroleum reserve. Global oil prices have spiked in volatile trade since Russia invaded Ukraine more than a month ago.

On Wall Street, stocks were modestly lower in early trading. The Dow Jones Industrial Average slipped 116 points, or 0.3%. The S&P 500 dipped roughly 0.1%, and the Nasdaq Composite was flat.

Despite the clouds hanging over the global economy and markets from the war in Ukraine and associated spikes in energy prices, Hugh Gimber, global market strategist at JPMorgan Asset Management, told CNBC on Thursday that governments’ approach to fiscal policy has shifted in the wake of the Covid-19 pandemic, and could prevent some of the harm to consumers that fuels recessionary fears.

“The consumer outlook has deteriorated and I think the risks to growth, particularly in the euro zone, now are elevated, but I’ll be watching for that policy response,” Gimber said, noting that governments have “lost their fear of debt” when dealing with circumstances that are beyond the consumer’s control.

“If it’s governments that decide to step in, then you shouldn’t see as big an impact on measures such as retail sales as you would expect normally just given the jump in prices that we’ve seen.”

— CNBC’s Eustance Huang contributed to this market report.