The growing threat of war between Ukraine and Russia has sent global oil and wheat prices soaring and triggered a headlong rush out of shares as investors sought bolt-holes from the crisis.
The prospect of a shattering conflict after Russian forces effectively occupied the Crimea sent shockwaves through commodity markets as dealers focused on Ukraine's strategic importance as Europe's bread basket.
US wheat futures jumped as much as 4.5% to $6.29 today – the highest since December – amid fears over disruptions to shipments from the Black Sea, one of the world's key grain exporting regions. Ukraine is forecast to export 10m tonnes of wheat and corn this year, according to estimates.
Brent crude rose 2% to $111.24 a barrel, the highest since the beginning of the year, as Russia – the world's biggest oil producer – was threatened with international pariah status following its actions.
In London, investors dumped stocks, sending the FTSE 100 80.28 points or 1.2% lower to 6729.42 – erasing £20bn from the value of the UK's biggest companies.
The only two blue-chip stocks in positive territory today were both gold miners – Randgold Resources and Fresnillo – as worried investors pushed the price of gold to $1348 an ounce, the highest since last October.
Major exchanges across Europe were on the back foot as money flowed into safe-haven UK, US and German debt, pushing down the cost of borrowing. Germany's Dax fell 2.3 per cent and France's CAC40 was off 1.7%.
In Russia however the Moscow Exchange fell 10% in early trading and the rouble slumped to its lowest point ever against the dollar and the euro as global leaders including US Secretary of State John Kerry threatened Russia with expulsion from the G8 group of nations, possible asset freezes and trade embargos.
CMC Markets analyst Michael Hewson said: "This will basically fuel concerns about emerging markets.
"What people are asking is, do we really want our money there?"