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Ukraine referendum tensions weigh on markets

Published on NewsOK Modified: May 9, 2014 at 11:09 am •  Published: May 9, 2014
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LONDON (AP) — Renewed jitters about Ukraine as pro-Russian militants pressed ahead with plans for an independence referendum weighed on markets Friday.

Ukraine continued to loom large for investors. Insurgents in the country's east are preparing for a weekend referendum on independence, a vote similar to the plebiscite that paved the way for Moscow's annexation of Crimea in March. Preparations have continued despite a call by Russian President Vladimir Putin to put off the vote amid negotiations with the West over Ukraine's future.

In Europe, the FTSE 100 index of leading British shares closed down 0.4 percent at 6,814.57 while Germany's DAX fell 0.3 percent to 9,581.45. The CAC-40 in France ended 0.7 percent lower at 4,477.28.

The main point of interest was the euro, after its sharp turnaround Thursday in the wake of a hint from European Central Bank President Mario Draghi that the bank could ease monetary policy further next month to boost inflationary pressures across the 18-country eurozone. Standing at an annual rate of 0.7 percent, inflation in the eurozone is below the ECB's target of just below 2 percent.

The ECB could, for example, cut interest rates which would make the euro less attractive. That's largely why the euro is down a further 0.6 percent Friday at $1.3756. Before Draghi made his remarks, the euro nearly hit $1.40 for the first time in two-and-a-half years.

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