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Asian stocks plunge after Putin announces action in Ukraine

BEIJING (AP) – Asian stock markets plunged yesterday after Russian President Vladimir Putin announced Russian military action in Ukraine.

Market benchmarks in Tokyo and Seoul fell two per cent. Hong Kong and Sydney lost more than three per cent.

Oil prices jumped more than USD4 on anxiety about possible disruptions of Russian supplies. The ruble fell 4.4 per cent against the dollar.

United States (US) futures were also sharply lower and the future for Germany’s DAX lost more than four per cent.

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

US President Joe Biden denounced the attack as “unprovoked and unjustified” and said Moscow would be held accountable, which many took to mean Washington and its allies would impose additional sanctions. Putin accused them of ignoring Russia’s demand to prevent Ukraine from joining NATO and to offer Moscow security guarantees.

“The relief rally has quickly reversed course,” said Jeffrey Halley of Oanda in a report.

Currency traders working at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

“Equities are tanking in Asia.”

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

Washington, Britain, Japan and the 27-nation European Union (EU) earlier imposed sanctions on Russian banks, officials and business leaders. Potential options for more penalties including barring Russia from the global system for bank transactions.

The Nikkei 225 in Tokyo fell 2.2 per cent to 25,855.04 and the Hang Seng in Hong Kong lost 3.1 per cent to 22,925.60. The Shanghai Composite Index was off 0.9 per cent at 3,458.12.

Asian economies face lower risks than Europe does, but those that need imported oil might be hit by higher prices if supplies from Russia, the third-largest producer, are disrupted, forecasters said.

The Kospi in Seoul lost 2.6 per cent to 2,649.29 and Sydney’s S&P-ASX 200 fell 3.1 per cent to 6,983.40.

New Zealand lost 2.8 per cent and Southeast Asian markets also fell.

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

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

The Nasdaq, dominated by technology stocks, lost 2.6 per cent to 13,037.49, led by steep losses in Apple and Microsoft. That put the index 18.8 per cent below its November 2021 high.

The Dow Jones Industrial Average fell 1.4 per cent to 33,131.76.

Investors already were 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 boostedshare prices.

Since the start of the year, Facebook parent Meta is down 41.4 per cent, Tesla is off 36.3 per cent and Microsoft is down 16.3 per cent, while Apple and Google’s parent Alphabet are both down 12.9 per cent.

In energy markets, benchmark US crude jumped USD4.36 to USD96.46 per barrel in electronic trading on the New York Mercantile Exchange.

The contract fell 25 cents to USD92.10 on Wednesday. Brent crude, the price basis for international oils, advanced USD4.32 to USD98.37 per barrel in London. It lost 20 cents to USD94.05 the previous session.

The dollar weakened to JPY114.56 from Wednesday’s JPY114.98. The euro fell to USD1.1211 from USD1.1306.


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