SINGAPORE - Stock markets across Asia were in a sea of red, while oil prices hit seven-year highs amid the threat of a full-scale invasion of Ukraine by Russia.
The repercussions from likely sanctions from the West, even higher energy and commodity prices and more hawkish monetary policy measures could disrupt the global economic recovery from the Covid-19 pandemic.
By the midday break, the Straits Times Index was down 0.83 per cent, or 28.62 points, to 3,407.74, after having fallen as much as 0.97 per cent minutes after trading started.
This came after Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine as independent, ordering forces into the area, likely torpedoing a last-minute bid for a summit with US President Joe Biden. Mr Biden was set to order retaliatory sanctions on the separatist regions of Ukraine, with the European Union vowing to take additional measures.
Brent crude futures jumped to a high of US$97.40 a barrel - their highest since September 2014 - on worries Russia’s energy exports could be disrupted. Natural gas was up nearly 7 per cent to US$4.74 per million British thermal units.
Safe-haven assets like gold rose. Spot gold added 0.2 per cent to US$1,909.10, having earlier hit a new six-month top of US$1,911.56.
With Asia stocks whiplashed by the Ukraine crisis, Hong Kong was the biggest casualty with a nearly 3 per cent fall. This was due to fears of a new wave of regulatory scrutiny by Beijing after a report that Chinese authorities told banks and state firms to report their financial exposure and links to Jack Ma’s Ant Group.
Shanghai stocks were down 1.4 per cent, while Shenzhen dropped 1.6 per cent. Japan lost 2.1 per cent, Taiwan and South Korea each shed 1.7 per cent.
“The pull-back in Asian stocks isn’t as bad as it seems because markets aren’t pricing in a full-blown war despite the latest developments. A bigger worry is the fallout from sanctions on Russia, which supplies one-third of gas to Europe. That will have a big impact on crude oil and gas prices, which could mean higher petrol and electricity prices for us,” KGI analyst Joel Ng said.
US and European markets were also bracing for sharp losses when they open later, with the S&P 500 futures down 1.8 per cent and Nasdaq futures off 2.5 per cent.
https://news.google.com/__i/rss/rd/articles/CBMifmh0dHBzOi8vd3d3LnN0cmFpdHN0aW1lcy5jb20vYnVzaW5lc3MvY29tcGFuaWVzLW1hcmtldHMvYXNpYS1zdG9ja3Mtc2xpZGUtb2lsLWp1bXBzLWFzLXJ1c3NpYS1vcmRlcnMtdHJvb3BzLXRvLXVrcmFpbmUtcmVnaW9uc9IBAA?oc=5
2022-02-22 06:15:56Z
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