Sruthi Sharma, Susan Mathew, and Bansari Mayur kamdar

(Reuters) -European stock markets fell to near one year lows Friday as bank and auto stocks were hit hard by reports that a nuclear power station was set ablaze in the midst of fierce fighting between Russia and Ukraine.

The pan-European indicator fell by 3.6%. The index lost 7% in this week’s latest decline, the worst since March 2020 when it was hit by a pandemic.

Since Russia’s invasion of Ukraine last Wednesday, it has seen a drop in value of more than 6 percent. Europe’s dependence upon Russia for its energy and proximity to the conflict are factors that have made Europe more vulnerable than others. Asia has suffered a loss of more than 4 percent since the invasion, but Wall Street indexes are up nearly 2%.

After a fire at a Ukrainian building, Russian forces seize the biggest European nuclear power station. This caused alarm around the world.

According to Danni Hewson (an analyst financial at AJ Bell), “The idea that there might be a nuclear catastrophe was almost unimaginable, and this kind of brings it home.”

For years, investors and companies will suffer the consequences of this.

Investor nerves were high and safe-haven bond and gold prices rose. The first measure of volatility in the euro zone stocks hit 45 points on June 2020.

Banks in the Euro zone fell 7.9% due to falling yields on government bonds. The rise in commodity prices was caused by Western sanctions against Russia. Russia is a leading commodity exporter. There are concerns over runaway inflation and slower economic growth.

German automakers fell 5.6% to finish at the bottom of this week’s European sector performance. The German-heavy German ended down 4.4%, close to their lowest point in over a year.

Michael Hewson chief market analyst for CMC Markets stated, “Nobody buys a brand new car when the price of commodities is going up.” They will see a significant drop in their sales and margins. Higher food and gasoline prices will have a major impact on consumer disposable income.

Other regional indexes included 40, Italy, and the UK. They all fell 5.0%.

The Dutch bank ING fell 9.7% following a statement that 700 million euro ($771million) of outstanding loans had been affected by the “new sanctions against (Russian] specific entities and persons”.

Michelin The PA: fell 7.2% following the announcement by France’s tyre manufacturer that it would suspend production temporarily at certain plants in Europe because of logistical problems.