By Susan Mathew, Bansari Mayur Camdar

(Reuters] European shares dropped on Thursday after the conflict in Ukraine reached its second month. The war was intensifying and Western countries escalated sanctions against Russia and bolstered Ukraine’s aid at a NATO summit.

Leaders from the West met in Brussels to discuss strengthening forces in Eastern Europe, increasing military aid to Ukraine, and tightening their sanctions towards Russia.

Michael Hewson chief market analyst, CMC Markets UK stated: “The tone at the meetings was uncompromising.”

After struggling to find direction all day, the pan-European Index fell by 0.2%.

The retail stock market fell 0.7% and banks dropped 0.7%. However, Next Clothing in Britain saw a 3.3% decline after it reduced its profits forecasts for 2022-223.

As investors fled sectors that were less affected by economic crises, nervousness became evident.

After declining for two months on concerns about inflation, monetary policy and the Ukraine war, the STOXX 600’s meagre gains so far in March are at risk going into the last week of the month.

Russian President Vladimir Putin stated Wednesday that Moscow will seek payments in roubles to purchase gas from “unfriendly” nations. This has jolted gas prices across Europe and raised the possibility of a supply shortage.

According to UBS Global Wealth Management strategists, Putin’s orders may help lift energy prices and challenge central bank sanctions. This could have an impact on EU policy decisions.

Frank Elderson, a member of the Dutch European Central Bank Executive Board, said that rates could be raised by the ECB this year.

Individual stocks gained 1.9% and 1.7%, respectively, for defence company BAE Systems (OTC) and Thales SA, while Rheinmetall rose 8.9%.

Daimler (OTC) Truck increased 7.1% following it stating that it expects little effect on 2022’s business from Russia’s invasion in Ukraine and the COVID-19 pandemic. It also forecasted revenue growth of at most 14%.

Telecom Italia After Reuters’ report that KKR is still interested in the Italian telecoms company, (MI:), gained 8.4%.

Richemont, a luxury goods company, fell 2.1% following the sale of all 20% in Greubel Forsey Swiss Watchmaker.

Russia stocks rose 4.4% during the meantime as trading resumed after a long hiatus. [RU/RUB]