Asian markets fall sharply as Russian invasion of Ukraine gets underway

Asian stock markets plunged and oil prices surged Thursday after President Vladimir Putin announced Russian military action in Ukraine.

Market benchmarks in Tokyo and Seoul fell 2% and Hong Kong and Sydney lost more than 3%.

Oil prices jumped nearly $ 3 per barrel on unease about possible disruption of Russian supplies.

Putin said the military operation was needed to protect civilians in eastern Ukraine, a claim Washington had predicted he would make to justify an invasion. Putin accused the United States and its allies of ignoring Russia’s demand to prevent Ukraine from joining NATO and offer Moscow security guarantees. President Joe Biden denounced the attack as “unprovoked and unjustified.”

As Putin spoke, explosions were heard in Kyiv, Kharkiv and other areas of Ukraine.

Read more: Putin launches invasion of Ukraine; Biden condemns ‘unprovoked and unjustified’ attack

Wall Street’s benchmark S&P 500 index fell 1.8% to an eight-month low after the Kremlin said rebels in eastern Ukraine asked for military assistance. Moscow has sent soldiers to some rebel-held areas after recognizing them as independent.

US Secretary of State Antony Blinken said Moscow appeared to be poised to invade. Western governments have imposed sanctions on Russian banks, officials and business leaders. They have more severe options in reserve.

“Geopolitical risks remain at the forefront, weighing on risk assets,” said Yeap Jun Rong of IG in a report.

The Shanghai Composite Index SHCOMP,
-2.11%
lost 0.9% and the Nikkei 225 NIK,
-1.81%
in Tokyo sank 2.2%. The Hang Seng HSI,
-3.17%
in Hong Kong tumbled 3.1%.

The Kospi 180721,
-2.54%
in Seoul lost 2.6% and Sydney’s S & P / ASX 200 XJO,
-2.99%
fell 3.2%. Benchmark indexes in Singapore STI,
-3.04%,
Taiwan Y9999,
-2.55%
and Indonesia JAKIDX,
-1.63%
fell.

Asian economies face lower risks than Europe does from a possible Russian attack and Western sanctions, forecasters say. But they say economies that need imported oil might be hit by higher prices if supplies from Russia, the third-largest producer, are disrupted.

On Wall Street, the S&P 500 SPX,
-1.84%
fell to 4,225.50. That put it 11.9% below its Jan. 3 record, solidly in a correction, or a decline of more than 10% from its latest peak.

More than 85% of stocks in the S&P 500 fell. Tech companies weighing down the index most.

The Nasdaq COMP,
-2.57%,
dominated by technology stocks, lost 2.6% to 13,037.49, led by steep losses in Apple AAPL,
-2.59%
and Microsoft MSFT,
-2.59%.
That put the index 18.8% below its November 2021 high.

The Dow Jones Industrial Average DJIA,
-1.38%
fell 1.4% to 33,131.76.

Investors were already 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 that boosted share prices.

In energy markets, benchmark US crude CLJ22,
+ 5.01%
rose $ 1.46 to $ 93.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to $ 92.10 on Wednesday. Brent crude BRNJ22,
+ 5.34%,
the price base for international oils, advanced $ 1.36 to $ 95.41 per barrel in London. It lost 20 cents to $ 94.05 the previous session.

The dollar USDJPY,
-0.47%
gained to 115.09 yen from Wednesday’s 114.98 yen.

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