As tensions over Ukraine continue to build, the risk of a flashpoint that could trigger conflict between Russia and the West may be growing.
Read More U.S. President Barack Obama imposed new sanctions on Russia on Monday, and these were followed closely by new penalties from the European Union. Washington accused pro-Russian separatists, who have occupied state buildings across Ukraine and are holding a number of hostages, as working for Kremlin agents.
The rising geopolitical tensions weighed on stocks on Monday. Asian equities closing mostly lower, with Japanese and Shanghai shares underperforming. In Europe, mergers and acquisitions activity boosted shares, which closed higher, but the bullish sentiment was capped by events in Ukraine.
Analysts told CNBC they were concerned the crisis was reaching a "flashpoint" – a trigger point that could suddenly lead to full-blown violence.
"Russia is almost poking the West, trying to look for a flashpoint to try and pursue Eastern Ukraine and try to make that a little bit more of a push from what they were previously doing in Crimea," Toby Lawson, managing director at Newedge told CNBC's "Rundown".
"I do think markets need to be aware that this could be a flashpoint at any time," he added.
Tensions between Russia and the Ukraine moved into the international spotlight in early March when Russia carried out a bloodless invasion of Ukrainian annex Crimea.
Global financial markets sold off in response at the time and the Russian and Ukrainian currencies have taken a particularly harsh battering year-to-date. However, the wave of panic selling seemed to have subside in the following weeks as most market watchers expected tensions to cool.
But recent weeks have seen a resurgence of aggression between the two countries. On Monday, Interfax Ukraina news agency reported that the mayor of Ukraine's second-biggest city, Kharkiv, was undergoing surgery after being shot in the back.
Pro-Russian separatists continue to occupy government buildings across the east of Ukraine, and in Donetsk, armed rebels have seized the regional television station's headquarters and ordered it to start broadcasting a Russian state TV channel, according to Reuters.
Violence escalated at the end of last week, and Russia warned Ukraine it would face justice for killing up to five of the separatists.
"In the east-west standoff over Ukraine, it's one escalatory step after another," said Nicholas Spiro, managing director at Spiro Sovereign Strategy.
"This is a crisis which is taking a dramatic turn for the worse - partly because it's becoming more complex and murkier with each passing day."
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