Asian markets slide as Russia shells Ukraine nuclear plant

BANGKOK — Shares were lower Friday in Asia after another bumpy day on Wall Street, as investors remain concerned about the broader impact of Russia’s invasion of Ukraine.

Shares fell more than 2% in Tokyo and Hong Kong and declined in most other Asian markets. U.S. futures


were lower. The S&P 500 fell 0.5% Thursday and the Nasdaq fell 1.6% as technology companies led the way lower.

Oil prices eased back from their recent highs and European markets also closed lower.

Russian troops were shelling Europe’s largest nuclear power plant, in Ukraine, raising worries over radiation risks.

A spokesman for the plant in Enerhodar, Ukraine, said in a video posted on Telegram that there was a “real threat of nuclear danger.” Andriy Tuz said shells were falling directly on the plant and had set fire to a reactor that was not operating but had nuclear fuel inside.

Elsewhere, Russian forces gained ground i n their bid to cut off the country from the sea, as Ukrainian leaders called on citizens to rise up and wage guerrilla war against the invaders.

Tokyo’s Nikkei 225 index

fell 2.4% while the Hang Seng

in Hong Kong slipped 2.7%. In Seoul, the Kospi

declined 1.3% and the Shanghai Composite index

lost 0.7%.

Australia’s S&P/ASX 200

shed 0.9%. Stocks rose in Indonesia

but declined in Singapore

and Taiwan

On Thursday, the S&P 500

fell 23.05 points to 4,363.49. The Dow

slid 0.3% to 33,794.66. The Nasdaq

dropped 214.07 points to 13,537.94.

The pullback left the indexes on pace for weekly losses, as meanwhile bond yields were mostly steady. The yield on the 10-year Treasury slipped to 1.85% from 1.86% late Wednesday.

Stocks rallied mid-week after Federal Reserve Chair Jerome Powell said he favored a modest interest rate increase at a policy meeting later this month. That reassured investors worried he might back more aggressive moves to fight inflation.

But Powell warned Thursday that the fighting in Ukraine is likely to further magnify the high inflation troubling world economies. He said he is committed to doing whatever is necessary to slow inflation, underscoring the high-risk challenge in raising interest rates enough to cool price pressures without triggering another recession.

Russia is a key oil producer and prices have been rising as global supplies are threatened by the conflict, raising concerns that persistent inflation could become even hotter.

Powell said inflation is thought to rise about 0.2 percentage point for each $10 increase in the price of a barrel of oil. Oil prices have surged by $40 a barrel since early December to about $110, suggesting price pressures will be higher than they otherwise would have been in coming months.

Early Friday, U.S. benchmark crude

rose $2.09 to $109.76 per barrel in electronic trading on the New York Mercantile Exchange. It lost $2.93 to $107.67 per barrel.

Brent crude
the international price standard, added $1.54 to $112.00.

Trading on the Moscow exchange remained closed Thursday. Russia’s ruble

lost another 15% against the U.S. dollar and is worth less than 1 cent. It has plunged since Western governments imposed sanctions that cut off much of Russia’s access to the global financial system.

The exposure and overlap that U.S. markets have to Russia is relatively low. The real risk is the exposure that European banks have to Russia, Young said.

“If European banks start to feel the contagion of that, then it’s about what’s our exposure to Europe, which surprisingly is still reasonably low,” she said. “That doesn’t mean there’s not sentiment risk. Nobody likes to hear about financial markets freezing up.”

Russia’s invasion of Ukraine has been the dominant issue for investors all week as they try to assess its global economic impact.

“For a world that was already grappling with worryingly high (cost-push) inflation before Ukraine’s invasion, the surge in commodity prices from the geo-political spill-over is not merely an inconvenience, but rather a binding economic threat,” Mizuho Bank said in a commentary.

Investors will get an update on the U.S. jobs market on Friday when the Labor Department releases its report for February.

“What we’re poised for is to really look hard at the jobs report tomorrow to see what the Fed needs to do and the state of the economy,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “Tomorrow’s average hourly earnings will provide a good read on inflation and whether consumers are able to keep up.”

In currency trading, the U.S. dollar

bought 115.37 Japanese yen, down from 115.47 on Thursday.

Read More: Asian markets slide as Russia shells Ukraine nuclear plant

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