Asia’s stock markets sank and oil prices rallied on Monday after the United States warned Russia was poised to attack Ukraine in a matter of days as diplomatic efforts to prevent a war appeared to fail.
And with traders also on edge over intensifying inflation fears there was an air of gloom across the region’s trading floors at the start of the week.
The losses matched the sell-off in New York and Europe on Friday as Western powers prepare for a conflict in eastern Europe after Russian President Vladimir Putin dismissed calls by US counterpart Joe Biden and others to pull back.
Governments have now told their citizens to leave Ukraine though German Chancellor Olaf Scholz was preparing to visit Kiev and Moscow to try to head off the crisis.
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The prospect of a conflict added to the gloomy mood on trading floors after data on Thursday showed US inflation hit a forecast-busting 7.5% in January, ramping up pressure on the Federal Reserve to hike interest rates by more than expected.
After sharp Wall Street losses on Friday, the dip continued in Asia on Monday. Tokyo and Mumbai each shed more than 2%, while Hong Kong, Shanghai, Seoul, Jakarta, Wellington and Taipei were at least 1% down. Singapore and Bangkok were also off, though Sydney and Manila rose.
The Nikkei 225 index dropped 2.23%, or 616.49 points, to close at 27,079.59, while the broader Topix index fell 1.63%, or 31.96 points, to 1,930.65.
The Hang Seng Index shed 1.41%, or 350.09 points, to 24,556.57. The Shanghai Composite Index lost 0.98%, or 34.07 points, to 3,428.88, while the Shenzhen Composite Index on China’s second exchange lost 0.43%, or 9.83 points, to 2,253.13.
Paris and Frankfurt plunged more than 3% in early trade, while London was 1.9% off.
Meanwhile, oil prices jumped, closing in on the $100-a-barrel mark last seen in 2014, as investors grow increasingly worried about supplies in the event of a war.
The crisis comes with crude already tight, owing to a pick-up in demand as economies reopen after the coronavirus pandemic and people return to a more normal life.
Key figures around 0840 GMT
Tokyo – Nikkei 225: DOWN 2.2% at 27,079.59 (close)
Hong Kong – Hang Seng Index: DOWN 1.4% at 24,556.57 (close)
Shanghai – Composite: DOWN 1.0% at 3,428.88 (close)
London – FTSE 100: DOWN 1.9% at 7,518.88
New York – Dow: DOWN 1.4% at 34,738.06 (Friday close)
- AFP with additional editing by Sean O’Meara
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