Beijing, Feb 14 (BNA): Asian stock markets fell on Monday, and oil prices rose amid fears of a possible Russian invasion of Ukraine.
The Tokyo benchmark index fell by an unusually wide daily margin of 2.1%. Shanghai, Hong Kong and Seoul also fell. Global crude oil prices have added more than $1 a barrel in a sign of concern about potential supply disruptions, the Associated Press reports.
On Wall Street, the S&P 500 fell 1.9% on Friday after the White House encouraged Americans to leave Ukraine within 48 hours. Other governments including Russia were withdrawing diplomats and their citizens from the country.
Russia is one of the largest oil producers. Any military action that disrupts supplies could send shock waves through global energy and industrial markets.
“Markets are waking up late to the geopolitical risks posed by Russian military action against Ukraine,” Rabobank said in a report.
The Nikkei 225 in Tokyo was down 2.1% to 27117.18 at midday, after falling 2.6% earlier.
The Bank of Japan made an offer to buy unlimited government bonds on Monday, moving to limit rising long-term interest rates. The Bank of Japan set the benchmark 10-year government bond purchase rate at 0.25%. The supply did not meet any bids, but it still had the effect of lowering interest rates and potentially reassuring investors of continued support for the markets.
The rate rose amid speculation that the Bank of Japan may start to undo its ultra-loose monetary policy in line with other central banks such as the Federal Reserve.
The latest decision highlights the BoJ’s intention to keep interest rates very low as inflation remains well below the target rate of 2%. The Japanese benchmark interest rate has been kept at -0.1% for years.
Hong Kong’s Hang Seng fell 1.2% to 24594.21. The Kospi index in Seoul fell 1.2% to 2,714.33.
The Shanghai Composite Index fell 0.6% to 3441.23 while the S&P-ASX 200 in Sydney rose 0.2% to 7,234.20.
India’s Sensex Index opened 1.7% lower at 57153.59. New Zealand, Bangkok and Jakarta prices fell while Singapore was unchanged.
Investors were already concerned about the Federal Reserve’s plans to end economic stimulus to cool four-decade-high inflation, and about the speed with which Europe and other central banks would follow.
On Friday, the S&P 500 fell to 4,418.64 for its fourth weekly loss in the past six weeks after President Joe Biden’s national security adviser, Jake Sullivan, said the threat of a Russian attack was “immediately sufficient” for Americans to leave Ukraine.
The Dow Jones Industrial Average lost 1.4% to 34,738.06. The Nasdaq Composite Index fell 2.8% to 13,791.15.
Investors have funneled money into Treasuries, gold and other assets seen as safe havens.
The market price of 10-year Treasuries, lowering their yield, or the difference between today’s rate and payment if held to maturity, rose to 1.91% from 2.03% Thursday.
Treasury prices have been dropping on expectations that the Federal Reserve will raise interest rates seven times this year. If the Federal Reserve manages to cool inflation, it will increase the purchasing power of payments from bonds, making them a more attractive investment.
In energy markets, benchmark US crude rose $1.31 to $94.41 a barrel in electronic trading on the New York Mercantile Exchange. The contract increased $3.22 on Friday to $93.10. Brent crude, the price basis for global oils, rose $1.04 to $95.48 a barrel in London. It gained $3.03 in the previous session to $94.44.
The dollar rose to 115.48 yen from 115.27 yen on Friday. The euro advanced to $1.1346 from $1.1334.