By Peter Nurse

Investing.com — European stock markets slumped Tuesday after Russian President Vladimir Putin ordered troops into eastern Ukraine on recognizing two breakaway regions as independent republics, taking the region to the brink of war.

By 3:35 AM ET (0835 GMT), the in Germany traded 1.6% lower, the in France dropped 0.9% while the U.K.’s fell 0.5%.

Global stock markets have been on edge for the last week as tensions were ramped up on the Ukraine border. Putin’s decisions to recognize two breakaway regions in eastern Ukraine as independent and then deploy troops in what Moscow called a peacekeeping operation has prompted investors to shun risk, causing a broad-based selloff.

U.S. President Joe Biden followed this by signing an executive order to halt any U.S. business activity in the breakaway regions, and Linda Thomas-Greenfield, U.S. ambassador to the United Nations, said, after an emergency meeting of the Security Council late on Monday, there would be further sanctions announced on Tuesday.

European Union ambassadors meet later Tuesday to discuss a plan for sanctions in response to Putin’s move, while Britain has said it too would sanction Russia.

In the corporate sector, HSBC Holdings PLC (LON:) stock fell 1.2%, with the banking sector hit hard on fears that sanctions on Russia could result in an increase in the sector’s bad loans. That said, HSBC is largely Asia-focused and reported pretax profit of $18.9 billion last year, up from the previous year’s $8.8 billion. It will also buy back up to $1 billion of its own shares, after completing its existing $2 billion buyback program.

SAS (ST:) stock slumped 4.6% after the Scandinavian airline said it will look to raise new capital after reporting a wider loss of 2.60 billion Swedish crowns ($275 million) for the November-January quarter loss of than a year earlier.

Investors will also focus on the release of Germany’s later Tuesday. Positive signs of an economic recovery could encourage the European Central Bank to unwind post-pandemic stimulus faster than expected, although the uncertainty sparked by the situation in Ukraine could stay the central bank’s hand.

Crude oil and gas prices soared Tuesday following Russian troops entering eastern Ukraine, raising the potential of a disruption of energy supplies if U.S. and European governments decide to impose oil or gas sanctions on Moscow as a consequence.

By 3:35 AM ET, futures traded 4.7% higher at $94.47 a barrel, while the contract rose 3.2% to $95.32, having earlier Tuesday climbed to its highest level since September 2014. were up 4% at $2.9245 a gallon.

Additionally, rose 0.3% to $1,905.85/oz, while traded 0.1% higher at 1.1314.