AFP

Global stock markets rallied on Wednesday in a volatile trading, with investors given an “energy boost” by an intervention by the Bank of England.

But geopolitical tensions continued to temper enthusiasm, analysts said, with heightened Ukraine tensions and looming recession fears.

Wall Street stocks traded up after the Bank of England’s surprise intervention in the British bond market pushed down bond yields in Britain and the United States.

Following a historic slump in the pound, the BoE announced it was temporarily buying up long-dated UK government bonds “to restore orderly market conditions.”

“The BoE intervention helped cooling the (dollar) strength and give an energy boost to the market,” said Ipek Ozkardeskaya, senior analyst at Swissquote bank.

The UK government’s 30-year bond yield retreated to 4.44 percent after the announcement, having hit a 1998 peak at 5.14 percent.

The yield on the 10-year US Treasury note — a closely-watched proxy of US interest rates — also pulled back as analysts said the BoE manoeuvre had “soothed” investors in the short run.

Britain’s new finance minister Kwasi Kwarteng’s tax-cutting budget sent shockwaves through markets, pushing the pound to a record low and leading to dire warnings for Britain’s economy — though sterling later rallied against the US currency.

The BoE intervention followed rare criticism from the International Monetary Fund, which argued that Britain’s recent budget could increase inequality and worsen inflation.

“The BoE’s intervention is an attempt to soothe investor nerves after they were spooked by last week’s mini-budget,” said City Index analyst Fawad Razaqzada.

After early losses, major indices in London, Frankfurt and Paris all closed up Wednesday.

– Fear grips markets –

Analysts warned of looming risks in the shape of soft economic data and crumbling earning expectations.

“Fear of tightening-induced recessions has wiped out the recovery we saw in stock markets over the bulk of the summer as investors were once again burned by an over-eagerness to catch the bottom in the market, despite there being little evidence of it being justified,” said OANDA’s Craig Erlam.

“That fear has now gripped the markets and we may see a little more caution going forward,” Erlam said.

Sentiment was also rattled by worries about developments in Ukraine, after Kremlin-installed authorities in four regions under Russian control claimed victory in annexation votes, with Moscow warning it could use nuclear weapons to defend the territories.

Ukraine and its allies have denounced the so-called referendums as a sham, saying the West would never recognise the results.

Volatile oil prices also rose Wednesday, as the EU proposed a new round of sanctions on Moscow, including a possible oil price cap.

Leaks from two Russia-Germany undersea gas pipelines — which the EU said were caused by deliberate sabotage — also threatened to fuel further tensions in the energy conflict.

– Key figures at around 1550 GMT –

London – FTSE 100: UP 0.3 percent at 7005.39 points (close)

Frankfurt – DAX: UP 0.4 percent at 12183.28 (close)

Paris – CAC 40: UP 0.2 percent at 5765.01 (close)

EURO STOXX 50: UP 0.2 percent at 3335.30 (close)

New York – Dow: UP 1.1 percent at 29436.77 

Tokyo – Nikkei 225: DOWN 1.5 percent at 26,173.98 (close)

Hong Kong – Hang Seng Index: DOWN 3.4 percent at 17,250.88 (close)

Shanghai – Composite: DOWN 1.6 percent at 3,045.07 (close)

Pound/dollar: UP at $1.0748 from $1.0730 on Tuesday

Euro/dollar: UP at $0.9639 from $0.9595

Euro/pound: UP at 90.67 pence from 89.39 pence 

Dollar/yen: DOWN at 144.45 yen from 144.81 yen

Brent North Sea crude: UP 1.9 percent at $86.73 per barrel

West Texas Intermediate: UP 2.9 percent at $80.77 per barrel

burs-rfj/rox/cdw

Heavy winds and rain pummelled Florida on Wednesday as Hurricane Ian intensified to just shy of the strongest Category 5 level, threatening to wreak “catastrophic” destruction on the southern US state.

Forecasters warned of a looming once-in-a-generation calamity, with life-threatening storm surges, extensive flooding and devastating winds promising what Florida Governor Ron DeSantis called a “nasty” natural disaster.

The National Hurricane Center (NHC) said in its latest advisory that the “extremely dangerous eyewall of Ian (was) moving onshore” and bringing sustained winds of 155 miles (250 kilometers) per hour, just two mph shy of Category 5 intensity — the strongest category on the Saffir-Simpson scale.

Some 2.5 million people were under mandatory evacuation orders in a dozen coastal Florida counties, with voluntary evacuation recommended in several others.

With the golden hour to flee having past — and hurricane force winds nearly touching southwestern Florida — authorities were advising residents to hunker down and stay indoors.

“Ian has strengthened into an extremely dangerous Category 4 hurricane,” the NHC said, warning of “catastrophic storm surge, winds, and flooding.”

Airports in Tampa and Orlando stopped all commercial flights, and some 337,000 households were already without power.

“This is going to be a nasty, nasty day, two days,” DeSantis said.

“It could make landfall as a Category 5, but clearly this is a very powerful major hurricane that’s going to have major impacts.”

With conditions rapidly deteriorating, some thrill-seekers were seen walking in the mud flats of Tampa Bay and in Charlotte Harbor, further south, ahead of Ian’s arrival.

The storm was expected to roar ashore in the coming hours near Fort Myers and Port Charlotte, along the state’s west coast, before moving across central Florida and emerging in the Atlantic Ocean by late Thursday.

With up to two feet (61 centimeters) of rain expected to fall on parts of the so-called Sunshine State, and a storm surge that could reach devastating levels of 12 to 18 feet (3.6 to 5.5 meters) above ground, authorities were warning of dire emergency conditions.

“This is a life-threatening situation,” the NHC warned.

– Widespread blackout –

Ian a day earlier had plunged all of Cuba into darkness after battering the country’s west as a Category 3 for more than five hours before moving back out over the Gulf of Mexico.

The storm damaged Cuba’s power network and left the island “without electrical service,” state electricity company Union Electrica said.

Only the few people with gasoline-powered generators had electricity on the island of more than 11 million people.

Others had to make do with flashlights or candles at home, and lit their way with cell phones as they walked the streets.

“Desolation and destruction. These are terrifying hours. Nothing is left here,” a 70-year-old resident of the western city of Pinar del Rio was quoted as saying in a social media post by his journalist son, Lazaro Manuel Alonso.

At least two people died in Pinar del Rio province, Cuban state media reported.

– ‘Historic event’ –

In the United States, the Pentagon said 3,200 national guardsmen had been called up in Florida, with another 1,800 on the way.

FEMA (Federal Emergency Management Agency) administrator Deanne Criswell warned that Ian’s “painful impacts” were being felt even before the hurricane’s landfall.

National Weather Service director Ken Graham echoed concerns about what lies ahead, expressing certainty Ian will leave a trail of destruction.

“This is going to be a storm we talk about for many years to come,” he said. “It’s a historic event.”

As climate change warms the ocean’s surface, the number of powerful tropical storms, or cyclones, with stronger winds and more precipitation is likely to increase. 

The total number of cyclones, however, may not.

According to Gary Lackmann, a professor of atmospheric science at North Carolina State University, studies have also detected a “potential link” between climate change and what is known as rapid intensification — when a relatively weak tropical storm surges to a Category 3 hurricane or higher in a 24-hour period, as happened with Ian.

“There remains a consensus that there will be fewer storms, but that the strongest will get stronger,” Lackmann told AFP.

Kremlin-backed officials in Ukraine appealed to President Vladimir Putin Wednesday to annex the regions under their control, after the territories held votes denounced by Kyiv and the West as a “sham”.

Ukraine called on the EU to hit Russia with more sanctions and NATO to send more weapons to the frontline after the Kremlin-installed officials rolled out the alleged results late Tuesday.

The appeal came despite repeated warnings from Moscow that it could use its nuclear arsenal to defend the territories from a Ukrainian counter-offensive that has wrested back swathes of territory this month already.

The EU slammed the “illegal” vote and said results were “falsified”, while Chancellor Olaf Scholz said Germany would “never recognise the results of the sham referendums”.

Lugansk was the first Russian-controlled region of Ukraine to appeal to Putin to intervene, with recently captured southern regions of Zaporizhzhia and Kherson filling in shortly after.

“Our residents made a historic choice and have decided to become part of the multinational population of the Russian Federation,” the Kremlin-installed leader in Kherson, Vladimir Saldo, said in a statement published on social media.

Only Donetsk — which along with Lugansk make up the industrial Donbas region and have been partially controlled by pro-Kremlin separatists since 2014 — had yet to formally ask Putin for annexation.

The appeal to Putin represents a turning point in the seven-month invasion as Russian officials in Moscow suggest they could use nuclear weapons in Ukraine and Putin calls up thousands of Russian military draftees to cement the Kremlin’s authority in the territories.

– ‘What have we ended up with?’ –

Taken together, the four territories — Kherson and Zaporizhzhia in the south; Donetsk and Lugansk in the east — create a crucial land corridor between Russia and the Crimean peninsula, annexed by Moscow in 2014. 

Together, all five make up around 20 percent of Ukraine, whose forces in recent weeks have been clawing back ground.

Despite those gains — particularly in the north east — Russian forces have battered the second-largest city of Kharkiv and overnight a salvo of missiles hit a railway yard, knocking out power to more than 18,000 households.

Iryna Mayor, 51, a machine operator in the rail wagon workshop, paused from shifting rubble and laying damp and torn record books out to dry, to angrily mock the invasion.

“We’re Russian-speaking people, and what have we ended up with? Have we got peace, brotherhood? No, you can see what we got,” she declared, pointing at the twisted debris surrounding the missile craters.

Lawmakers are expected to vote hastily to annex the territories now that the results have been announced, and Russian news agencies have said Putin could sign legislation formalising the land grab this week.

The EU slammed the “illegal” annexation votes and their “falsified” results, the bloc’s foreign policy chief Josep Borrell said and Scholz repeated that Germany believes the ballots carry no weight.

“Germany will never recognise the results of the sham referendums” in the regions of Donetsk, Lugansk, Kherson and Zaporizhzhia, Scholz told Ukrainian President Volodymyr Zelensky, according to the chancellor’s spokesman Steffen Hebestreit.

– ‘I’m in shock’ –

Putin’s threat to use nuclear weapons in Ukraine coincided with his decision to call up hundreds of thousands of military reservists to back up Russia’s struggling forces in eastern Ukraine.

The move has sparked panic, protests and an exodus among military-aged Russian men for neighbouring countries like Georgia and Kazakhstan.

Moscow announced Wednesday it would no longer issue passports to Russian men called up to serve and a region bordering Russia closed to passenger cars, with both moves fuelling fears in Russia that borders could close entirely.

But at a military recruitment office in Saint Petersburg there was confusion and resignation, as draftees and their families bid each other goodbye.

Nikita, a 25-year-old reservist, had tears in his eyes as he held hands with his 22-year-old fiance as he said goodbye.

“If you have to go, you have to,” he said. 

“I don’t know what to say. I am in shock,” Alina said, her gaze locked on Nikita.

Along the frontline of Ukraine, six people were injured in the Kharkiv region by Russian strikes, officials in Kyiv said, while five civilians were killed and 10 more wounded by Moscow’s forces.