Asian stock markets fell Monday and oil prices rose amid concern about a possible Russian invasion of Ukraine.
Tokyo’s benchmark index fell by an unusually wide daily margin of 2.6 per cent. Shanghai, Hong Kong and Seoul also retreated.
On Wall Street, the benchmark S&P 500 index tumbled 1.9 per cent on Friday after the White House encouraged Americans to leave Ukraine within 48 hours. Other governments including Russia were pulling diplomats and their citizens out of the country.
Russia is one of the biggest oil producers. Any military action that disrupts supplies could send shockwaves through global energy markets and industry.
“Markets are belatedly waking up to the geopolitical risks posed by Russian military action against Ukraine,” said Rabobank in a report.
The Nikkei 225 in Tokyo fell 2.6 per cent to 26,970.34 and the Hang Seng in Hong Kong lost 1 per cent to 24,665.17. The Kospi in Seoul retreated 1.6 per cent to 2,703.06.
The Shanghai Composite Index shed 0.4 per cent to 3,448.46 while Sydney’s S&P-ASX 200 gained 0.6 per cent to 7,257.70. New Zealand and Jakarta declined while Singapore was unchanged.
Investors already were on edge about Federal Reserve plans to wind down economic stimulus to cool inflation that is at a four-decade high and about how quickly Europe and other central banks would follow.
On Friday, the S&P 500 declined to 4,418.64 for its fourth weekly loss in the past six weeks after President Joe Biden’s national security adviser, Jake Sullivan, said the threat of a Russian attack is “immediately enough” that Americans should leave Ukraine.
The Dow Jones Industrial Average lost 1.4 per cent to 34,738.06. The Nasdaq composite dropped 2.8 per cent to 13,791.15. Investors moved money into Treasury bonds, gold and other assets seen as safe havens.
The market price of a 10-year Treasury rose, pushing down its yield, or the difference between the day’s price and the payout if held to maturity, to 1.91 per cent from Thursday’s 2.03 per cent.
Treasury prices had been falling on expectations the Fed will raise interest rates as many as seven times this year. If the Fed succeeds in cooling inflation, that would increase the buying power of the payout from bonds, making them a more attractive investment.
In energy markets, benchmark US crude rose USD 1.52 to USD 94.62 per barrel in electronic trading on the New York Mercantile Exchange. The contract added USD 3.22 on Friday to USD 93.10. Brent crude, the price basis for international oils, advanced USD 1.36 to USD 95.80 per barrel in London.
It gained USD 3.03 the previous session to USD 94.44.
The dollar gained to 115.50 yen from Friday’s 115.27 yen. The euro advanced to USD 1.1349 from USD 1.1334.
