Ukraine Crisis: Investors In Flight From Risk

World stock markets have fallen while the Russian Rouble has hit its lowest ever level against the dollar as the crisis in Ukraine unfolds.

Investors are worried by the diplomatic stand-off between the West and Russia over President Vladimir Putin's decision to effectively occupy Ukraine's Crimea region in the wake of the change in leadership in Kiev.

The US threatened possible asset freezes and trade penalties as a response to Russia's military intervention.

The resulting flight from risk on the markets first saw stocks fall and gold rise in Asia, where the Nikkei in Japan lost 1.3%.

President Putin is risking economic isolation with the West

The Moscow stock exchange later lost up to 10% of its value when it opened for business while Russia's central bank reacted to a plunge in the value of the rouble by raising interest rates to 7% from 5.5%.

The central bank did not mention Ukraine in its statement, but said the decision was aimed at preventing "risks to inflation and financial stability associated with the recently increased level of volatility in the financial markets."

Gold is among the commodities to rise alongside oil and wheat

The rouble, which was already down nearly 10% this year, had fallen below 50 to the euro for the first time.

It began trading below 36.4 to the dollar, also a record.

Shares in Russian state-owned Gazprom were reportedly down more than 18% amid reports it will have to end discounted gas deals with Ukraine as tensions intensify over the debt-laden country's future.

European stock markets responded to the uncertainty in the region by falling more than 2% in some cases in early trading.

In London, the FTSE 100 lost 1.6% in the first few minutes of trading, with only two companies seeing any gains.

Commodities were also volatile, with Brent Crude oil rising 2% and a combination of the crisis in Ukraine and poor weather combining to push wheat costs up almost 5%.

Gold was another asset to see gains as investors looked to move their money towards the traditional safe haven.

The market instability played out as efforts to help shore up Ukraine's finances gained momentum.

It was confirmed an international Monetary Fund (IMF) mission will arrive in Kiev on Monday as the country seeks $35bn (£21bn) in financial assistance to avoid bankruptcy.

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