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Sydney — Asian share benchmarks dropped on Tuesday as investors contemplated the implications of a potential imminent Russian invasion of Ukraine.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4% in early regional trade after stock markets in the US and Europe lost ground on Monday.
Japan’s Nikkei was down 0.2%, while in Australia the S&P/ASX200 was off 0.32%.
Hong Kong’s Hang Seng index slid 0.52% early in the session, though China’s CSI300 Index bucked the trend and was up 0.2%.
“Geopolitical risk will be the clear driver of sentiment for markets this week,” said Marcella Chow, global markets strategist at JPMorgan Asset Management. “The broader risk appetite among investors is going to be under pressure and as a result we expect to see a flight to safety in gold, US dollars and longer-term treasuries.”
Overnight, the Dow Jones industrial average fell 0.49%, the S&P 500 lost 0.38% and the Nasdaq Composite was essentially flat, losing just 0.24 point.
Oil shot to the highest level in seven years in US trading on Monday on Russia-Ukraine tensions but weakened slightly during the Asian session.
The US warned on Monday that Russia could soon invade Ukraine. Secretary of state Antony Blinken said the US embassy would be relocated from Kyiv to Lviv, citing the “dramatic acceleration in the build-up of Russian forces”.
“There are concerns about the possibility of the biggest military action in Europe since the World War 2,” said James Rosenberg, EL&C Baillieu financial adviser. “So far, the market is just keeping a watchful eye and it doesn’t appear to have had much impact. This could change dramatically if the Russians do attack Ukraine.”
The G7 large economies warned of “economic and financial sanctions which will have massive and immediate consequences on the Russian economy”.
Global index provider MSCI said it was monitoring developments in Ukraine and access to the Russian equity market.
The yield on benchmark 10-year treasury notes was at 1.9753% compared with its US close of 1.996% on Monday. The two-year yield, which rises with traders’ expectations of higher Federal Reserve fund rates, touched 1.562% compared with a US close of 1.589%.
Despite the Russia-Ukraine tensions, futures markets are still pointing towards a high likelihood of the Fed raising interest rates at its March meeting.
“Global financial markets are caught in a pincer movement between geopolitics (Ukraine) and high inflation,” ANZ economists wrote in a note Tuesday.
US crude dipped 0.61% to $94.88 a barrel during the Asian session after notching a seven-year high. Brent crude was down 0.4% at $96.12 a barrel.
Gold was slightly higher. Spot gold was traded at $1,870.92 an ounce.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Asian markets slip
Sydney — Asian share benchmarks dropped on Tuesday as investors contemplated the implications of a potential imminent Russian invasion of Ukraine.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4% in early regional trade after stock markets in the US and Europe lost ground on Monday.
Japan’s Nikkei was down 0.2%, while in Australia the S&P/ASX200 was off 0.32%.
Hong Kong’s Hang Seng index slid 0.52% early in the session, though China’s CSI300 Index bucked the trend and was up 0.2%.
“Geopolitical risk will be the clear driver of sentiment for markets this week,” said Marcella Chow, global markets strategist at JPMorgan Asset Management. “The broader risk appetite among investors is going to be under pressure and as a result we expect to see a flight to safety in gold, US dollars and longer-term treasuries.”
Overnight, the Dow Jones industrial average fell 0.49%, the S&P 500 lost 0.38% and the Nasdaq Composite was essentially flat, losing just 0.24 point.
Oil shot to the highest level in seven years in US trading on Monday on Russia-Ukraine tensions but weakened slightly during the Asian session.
The US warned on Monday that Russia could soon invade Ukraine. Secretary of state Antony Blinken said the US embassy would be relocated from Kyiv to Lviv, citing the “dramatic acceleration in the build-up of Russian forces”.
“There are concerns about the possibility of the biggest military action in Europe since the World War 2,” said James Rosenberg, EL&C Baillieu financial adviser. “So far, the market is just keeping a watchful eye and it doesn’t appear to have had much impact. This could change dramatically if the Russians do attack Ukraine.”
The G7 large economies warned of “economic and financial sanctions which will have massive and immediate consequences on the Russian economy”.
Global index provider MSCI said it was monitoring developments in Ukraine and access to the Russian equity market.
The yield on benchmark 10-year treasury notes was at 1.9753% compared with its US close of 1.996% on Monday. The two-year yield, which rises with traders’ expectations of higher Federal Reserve fund rates, touched 1.562% compared with a US close of 1.589%.
Despite the Russia-Ukraine tensions, futures markets are still pointing towards a high likelihood of the Fed raising interest rates at its March meeting.
“Global financial markets are caught in a pincer movement between geopolitics (Ukraine) and high inflation,” ANZ economists wrote in a note Tuesday.
US crude dipped 0.61% to $94.88 a barrel during the Asian session after notching a seven-year high. Brent crude was down 0.4% at $96.12 a barrel.
Gold was slightly higher. Spot gold was traded at $1,870.92 an ounce.
Reuters
Oil hits seven-year peak over fears sanctions could follow Russian invasion
JSE faces mixed Asian markets on Tuesday as Ukraine crisis continues
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