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Asian shares mixed as Ukraine tensions send US stocks lower

BANGKOK (AP) – Stocks fell yesterday in Asia after a retreat on Wall Street as escalating worries over the possibility Russia may invade Ukraine rattled global financial markets.

Benchmarks were moderately lower in Tokyo, Sydney and Hong Kong, but rose in Shanghai.

On Thursday, the S&P 500 fell 2.1 per cent, its biggest drop in two weeks, the Dow Jones Industrial Average declined 1.8 per cent and the Nasdaq composite slid 2.9 per cent. The losses wiped out the major indexes’ weekly gains.

The wave of selling came as United States (US) President Joe Biden warned that Russia, which is believed to have built up some 150,000 military forces near Ukraine’s borders, could invade within days.

Dignitaries raced for solutions but suspicions between East and West only seemed to grow, as NATO allies rejected Russian assertions it was pulling back troops from exercises that had fuelled fears of an attack. The Ukraine crisis has hung over markets for weeks, adding to volatility in markets.

Russia is a major energy producer and if it invades Ukraine and other governments respond with economic sanctions, that could impede access to about seven per cent of the global energy market, said senior portfolio manager with Globalt Investments Tom Martin.

“Without any clear resolution in the near term, the uncertainty for a potential invasion is sufficient to keep market participants shunning from risk assets, while flocking to safe-havens,” Yeap Jun Rong of IG said in a commentary.

Japan reported yesterday that its core inflation rate, excluding volatile energy and food costs, rose 0.2 per cent in January, way below the decades-high figures seen in most major economies and far short of the Bank of Japan’s two per cent target. Tokyo’s Nikkei 225 index lost 0.3 per cent to 27,154.99, while the Hang Seng in Hong Kong gave up 0.4 per cent to 24,685.44. The Kospi in Seoul lost 0.1 per cent to 2,742.41. Australia’s S&P/ASX 200 declined 0.7 per cent to 7,242.30.

The Shanghai Composite index rose 0.3 per cent to 3,478.46. About 85 per cent of the stocks in the benchmark S&P 500 closed lower on Thursday. It fell 94.75 points to 4,380.26 and is now 8.7 per cent below the all-time high it set on January 3.

The Dow slid 622.24 points to 34,312.03, while the tech-heavy Nasdaq lost 407.38 points
to 13,716.72.

Small company stocks also fell broadly. The Russell 2000 index gave up 2.5 per cent to 2,028.09.

The technology sector was the biggest drag on the index, along with communication stocks and companies that rely on consumer spending. Microsoft fell 2.9 per cent, Facebook parent Meta slid 4.1 per cent and Nike fell 2.5 per cent.