Asian stocks plunge after Putin announces action in Ukraine
Asian stock markets plunged and oil prices rose by nearly $100 a barrel on Thursday after President Vladimir Putin announced Russia’s military action in Ukraine.
Market benchmarks in Tokyo and Seoul fell 2%. Hong Kong and Sydney lost more than 3%.
Oil prices rose more than $4 on worries about possible Russian supply disruptions. The ruble fell 4.4% against the dollar.
US futures also fell sharply and German DAX futures lost more than 4%.
Putin says military action is needed to protect civilians in eastern Ukraine, a statement Washington has predicted he will make to justify an invasion. As Putin spoke, explosions were heard in Kyiv, Kharkiv and other parts of Ukraine.
President Joe Biden condemned the attack as “gratuitous and unprovoked” and said Moscow would be held accountable, for which many expect Washington and its allies to impose further sanctions. . Putin accused them of ignoring Russia’s demands to prevent Ukraine from joining NATO and providing security guarantees to Moscow.
“The relief rally quickly reversed course,” said Jeffrey Halley of Oanda in a report. “Stocks are rising in Asia.”
Wall Street’s benchmark S&P 500 fell 1.8 percent on Wednesday to an eight-month low after the Kremlin said rebels in eastern Ukraine requested military assistance. Moscow has sent troops to several rebel-held areas after recognizing them as independent.
Washington, Britain, Japan and 27 European Union countries have previously imposed sanctions on Russian banks, officials and business leaders. Potential options for more fines include banning Russia from the global system for banking transactions.
The Nikkei 225 in Tokyo fell 2.2% to 25,855.04 and the Hang Seng index in Hong Kong lost 3.1% to 22,925.60. The Shanghai Composite Index fell 0.9% at 3,458.12.
Asian economies face lower risks than Europe, but those that need imported oil could be hit by higher prices if supplies from Russia, the third largest producer, are disrupted, the forecaster said.
Kospi in Seoul lost 2.6% to 2,649.29 and Sydney’s S&P-ASX 200 dropped 3.1% to 6,983.40.
New Zealand lost 2.8% and Southeast Asian markets also fell.
On Wall Street, the S&P 500 fell to 4,225.50. That leaves it 11.9% below the January 3 record, certainly in a correction or down more than 10% from the most recent peak.
More than 85% of stocks in the S&P 500 fell. Tech companies lower the index the most.
Nasdaq, dominated by technology stocks, lost 2.6% to 13,037.49, led by heavy losses from Apple and Microsoft. That puts the index 18.8% below its November 2021 high.
The Dow Jones Industrial Average fell 1.4% to 33,131.76.
Investors have been uneasy about the possible impact of the Federal Reserve’s plans to try to cool inflation by withdrawing ultra-low interest rates and other stimulus measures that have boosted prices. share.
Since the start of the year, Facebook’s parent Meta is down 41.4%, Tesla is down 36.3% and Microsoft is down 16.3%, while Apple and Google’s parent Alphabet are both down 12.9%.
In the energy market, the price of U.S. benchmark crude rose $4.36 to $96.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to $92.10 on Wednesday. Brent crude, the base price for international oil, rose $4.32 to $98.37 a barrel in London. It lost 20 cents to $94.05 in the previous session.
The dollar weakened to 114.56 yen from 114.98 yen on Wednesday. The euro fell to $1.1211 from $1.1306.