Shares fell in Asia on Tuesday after Wall Street posted its biggest drop in more than a year as the market was rattled by another oil rally.
Benchmarks fell in Tokyo, Sydney, Hong Kong, Seoul and Shanghai after the S&P 500 fell 3%.
Oil prices spiked to $130 a barrel on Monday triggered by the possibility that the US might ban crude imports from Russia. Oil prices were steady late in the day and moderately higher early Tuesday.
The third round of peace talks between Ukraine and Russia failed to produce major results. A top Ukrainian official said there had been small, unspecified progress in establishing safe corridors to allow civilians to escape the fighting.
But Russian forces continued shelling as food, water, heat and medicine became increasingly scarce in Ukraine.
Soaring prices of oil and other key commodities are roiling global markets and the situation remains uncertain as investors seek safe haven from expanding sanctions against Russia.
Analysts expect the war in Ukraine to be at the top of the agenda for some time to come and say the impact of the conflict has yet to be fully accounted for.
SPI Asset Management’s Stephen Innes said in a commentary: “Disruption to energy markets and the potential for shifting geopolitical patterns create a highly unpredictable environment. light in the end of tunnel. “
Japan’s benchmark Nikkei 225 index fell 1.7% in afternoon trade to 24,783.70. Australia’s S&P/ASX 200 fell 0.8% to 6,980.30. South Korea’s Kospi fell 0.8% to 2,631.49. Hong Kong’s Hang Seng lost 0.5% to 20,956.39, while the Shanghai Composite fell 1.2% to 3,333.49.
On Monday on Wall Street, the S&P 500 fell 122.78 points to 4,201.09. The Dow Jones Industrial Average fell 2.4% to 32,817.38.
The tech-heavy Nasdaq composite fell 3.6% to 12,830.96 and is now 20.1% below the record set in November. That means the index is in the mix. Wall calls it a bear market. The S&P 500 is down 12.4% from its peak in early January.
Gold – Wall Street’s gauge of anxiety – also rose, though not as much as when oil prices peaked. Gold price briefly touched the level of 2,007.50 USD/ounce. By Tuesday afternoon, it was at $1,995.88, down 0.1%.
Benchmark US crude rose $2.67 to $122.07 a barrel in electronic trading on the New York Mercantile Exchange. It settled at $119.40 a barrel on Monday, up 3.2%, after touching $130.50 earlier. Brent crude, the international pricing benchmark, added $3.75 to $126.96 a barrel. It was pegged at $123.21 per barrel, up 4.3%, after topping out at $139 previously.
Worry is growing that Russia’s invasion of Ukraine will consume already tight oil supplies. Russia is one of the world’s largest energy producers and oil prices were already at pre-attack highs as the global economy is demanding more fuel following a shutdown caused by the coronavirus.
The U.S. ban on imports of Russian oil and other energy products, if implemented, would be an important step for the U.S. government, although the White House has said it hopes to limit it. limit oil market disruptions and limit gasoline pump price spikes.
Reports also suggest that US officials may be considering easing sanctions on Venezuela. That is likely to free up more crude and ease concerns about a drop in supply from Russia.
A typical gallon has averaged $4,065 nationally after breaking the $4 barrier on Sunday for the first time since 2008. A month ago, an average gallon was $3,441, according to AAA .
The battle put more pressure on central banks around the world, with the US Federal Reserve set to raise interest rates later this month for the first time since 2018. Higher rates slow the economy , hope to help curb high inflation. But if the Fed raises interest rates too quickly, it risks forcing the economy into a recession.
“Their response to geopolitics is really unmeasurable, so there will be uncertainty around that,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. said.
In addition to the sanctions that governments put in place against Russia for its invasion of Ukraine, companies are also imposing their own sanctions. The list of companies leaving Russia has grown to include Mastercard, Visa and American Express, as well as Netflix.
On Wall Street, Bed Bath & Beyond shares rose 34.2% to $21.71 after billionaire Ryan Cohen’s investment firm took a nearly 10% stake in the company and made big changes. Cohen is a co-founder of Chewy, and he’s amassed somewhat of a cult following after he bought a stake in GameStop, the struggling video game chain that eventually named him board chairman. administration.
Treasury yields were up, with 10-year notes rising to 1.78% from 1.72% late Friday.
In currency trading, the US dollar rose to 115.48 Japanese yen from 115.32 yen. The euro is priced at $1.0865, up from $1.0853.
AP Business Writers Stan Choe and Alex Veiga contributed.