European Stock Futures Slump

European Stock Futures

CAC 40 is trading down 3.11% at 6542.71

European stock markets are expected to plunge at the open Monday, as investors digest the news of Western governments ramping up the sanctions on Russia and President Vladimir Putin placing his country’s nuclear deterrent on high alert.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 3.2% lower, CAC 40 futures in France dropped 2.5% and the FTSE 100 futures contract in the U.K. fell 2.2%.

The abject start to the week comes after equities rallied on Friday, as traders reacted to the rapidly changing geopolitical situation in eastern Europe.

Western nations announced plans over the weekend to further sanction Russia as it continued to strike targets in Ukraine, excluding some Russian banks from the SWIFT financial messaging system, used by most financial institutions around the globe for trillions of dollars’ worth of transactions. Payment for Russian energy supplies will, however, still be possible.

Additionally, the EU and U.S. announced moves that effectively froze over half the extent the Russian Central Bank’s foreign reserves, limiting its ability to support the ruble, which fell some 30% in early trading on Monday. That prompted the Bank of Russia to hike its key interest rate to 20%, while S&P Global Ratings downgraded Russian bonds to junk status.

In a marked shift, the EU also said it would start sending lethal weapons to Ukraine to help it defend itself, and EU Commission head Ursula von der Leyen also signalled the bloc would accept an application for membership from the country. Russian President Vladimir Putin put Russia’s nuclear deterrent on high alert on Sunday in response to the more aggressive stance by the West.

On technical fronts CAC 40 RSI stood at 28.05 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss:

TRADE SIGNAL – : CAC 40 – SELL: 6540.20, TARGET: 6486.10, STOP LOSS : 6580.50

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