Hong Kong: Asian markets fell and oil prices rose Thursday on growing fears of a war in eastern Europe after Moscow said separatists had called for help to repel Ukrainian forces and Vladimir Putin announced a ‘military operation’.
The threat of a conflagration has sent markets spiralling, with traders fretting over supplies of key commodities including wheat and metals.
Crucially, oil has soared to within spitting distance of $100, and both main contracts were up more than one percent Thursday.
“Russia/Ukraine tensions bring both a possible demand shock (for Europe), and more importantly a much larger supply shock for the rest of the world given the importance of Russia and Ukraine to energy, hard commodities and soft commodities,” said National Australia Bank’s Tapas Strickland.
The crisis comes as governments struggle to contain runaway inflation fuelled by demand as life returns after recent lockdowns, with many fearing the fragile global economic recovery from the pandemic could be knocked off course.
After staging a slight bounce Wednesday in reaction to what were considered light sanctions against Moscow, Asian markets were back in the red after a hefty drop on Wall Street.
Hong Kong, Tokyo, Shanghai, Seoul, Sydney, Singapore, Taipei, Jakarta and Wellington all fell.
