A man wearing a protective mask, amid the outbreak of the coronavirus disease (COVID-19), walks through an electronic board showing Japan’s Nikkei index and prices of stock market indices in different countries outside a brokerage in Tokyo, Japan, February 22, 2022. REUTERS/Kim Kyung-Hoon
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- MSCI Asia excluding Japan fell more than 3%, the lowest since November 2020
- European stock futures point to a sharp lower opening
- Ukraine says Russia launched a large-scale invasion
- Gold is the highest since 2021, oil breaks through $100
- Civilian flights banned in Ukraine
SHANGHAI (Reuters) – Global stocks and US bond yields fell on Thursday, while the dollar, gold and oil prices rose sharply as Russian forces fired missiles at several Ukrainian cities and landed troops on its southern coast. Read more
Shortly after President Vladimir Putin announced that he had authorized what he called a special military operation, explosions were heard quietly before dawn in the Ukrainian capital, Kiev, and the Ukrainian government accused Moscow of launching a full-scale invasion. Read more
US President Joe Biden said the United States and its allies would impose “severe sanctions” on Russia after the attacks. Read more
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It appears that the collapse of stocks in Asia will continue in Europe and the United States, with a sharp jump in commodity prices, adding to concerns about inflation and risks to economic growth.
German Euro Stoxx 50 and DAX futures are down more than 3.5% in early trades, while FTSE futures are down 2%.
S&P 500 e-minis are down 2.3% and Nasdaq futures are down 2.8%, putting the US index on the right track towards confirming that it is in a bear market.
A close of at least 20% from the record November 19 close of 16,057,437 points would confirm that the Nasdaq was in a bear market, according to a widely used definition. That would be its first bear market since 2020, when the coronavirus outbreak swept global financial markets.
The Moscow Stock Exchange announced the suspension of all trading on Thursday. Read more
In Asia, MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) It fell more than 3.2 percent to its lowest level since November 2020. Australian shares (.AXJO) Shedding more than 3% and excellent Chinese chips (.CSI300) lost 2%.
Nikkei in Tokyo (.N225) It was 2.1% lower.
“The market has always been trying to judge whether (Russia) will stop at Donbass, and it seems clear that they are heading towards Kiev, which was always one of the worst-case scenarios, because we now have a long night trying to understand how far Bad that, the sanctions that are being imposed, because there has to be a new round of sanctions now against Putin and the Russian government.”
“This is the worst place, or bear scenario for the markets, and that’s what we’re seeing. There are no buyers here to take the risk, and there are a lot of sellers, so this market is taking a heavy hit.”
Asset markets have seen a sharp increase in volatility during the deepening crisis, with the Cboe volatility index, known as Wall Street’s fear gauge, up more than 55% over the past nine days. (.VIX)
Brent crude futures, which swung between sharp highs and lows on Wednesday, jumped more than 3.5% to surpass $100 a barrel on Thursday for the first time since September 2014.
West Texas Intermediate jumped 4.6% to $96.22 a barrel, its highest level since August 2014.
The spot gold price jumped more than 1.7 percent to its highest level since early January 2021.
The deepening sell-off in stocks came after US stocks already took the hit on Wednesday, with the Dow Jones Industrial Average (.DJI) It fell 1.38% to just above the level that would have confirmed the correction. S&P 500 . Index (.SPX)Which confirmed the correction the day before, it lost 1.84% to 4225.5.
Investors are also grappling with the prospect of an imminent policy tightening by the US Federal Reserve aimed at combating rising inflation, which NAB analysts say could be exacerbated by the commodity supply shock.
While expectations for a sharp 50 basis point hike at the Fed’s March meeting have cooled, Fed fund futures continue to point to at least six rate hikes this year. FEDWATCH
Despite this, immediate geopolitical threats weighed on US yields on Thursday, pushing the US 10-year benchmark yield sharply down to 1.8681% from the US close of 1.977% on Wednesday. The two-year yield also fell to 1.5% from a close of 1.6%.
The global flight to safety boosted the dollar, which jumped by more than half a percent of a basket of other major trading partners to 96.715.
The euro was down 0.8% on the day at $1.1220.
The Russian ruble turned violently lower after posting small gains early in the session. Its last drop of 5.77% was on top of a 3% drop against the dollar on Wednesday.
The selloff spread across the cryptocurrency markets, pushing Bitcoin below $35,000 for the first time in a month.
“Markets are now pricing more appropriately at the risk of something horrible happening,” said Rob Carnell, head of Asia Pacific research at ING. “That combined with uncertainty is a horrific environment to live in. Nobody wants to take risks when that is trading.” .
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Additional reporting by Andrew Galbraith in Shanghai; Additional reporting by Kevin Buckland in Tokyo, Sinad Karo and Noel Randewicz in New York, Elon John in Hong Kong and Wayne Cole in Sydney; Editing by Shree Navaratnam and Kim Koogill
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