Asian stocks fell on Thursday as Russia launched its invasion of Ukraine, prolonging declines in the United States and Europe, which were fueled by fears of an all-out attack.
Japan’s Nikkei 225 was down just over 2.1% in the early afternoon. In Hong Kong, the Hang Seng index fell 3.1%, while the Kospi composite index in South Korea fell 2.7%.
The overall global market has taken a turn for the worse in recent days. The Stoxx Europe 600 reversed its initial gains to drop 0.3% on Wednesday. The S&P 500 recorded a fourth straight day of decline, losing 1.8 percent and sliding deeper into a correction – down more than 10 percent from recent highs. It is now down 11.9% from its peak on January 3.
News from Ukraine is becoming more and more dire on Thursday. Russian President Vladimir V. Putin ordered the start of “a special military operation” and the Ukrainian government confirmed that several cities were under attack. Cyberattacks also brought down government institutions in Ukraine.
Moscow’s stock exchange stopped trading and the ruble fell to a record low against major currencies.
A full-scale invasion could have widespread effects on commodities, including oil, natural gas, wheat, and metals. Europe is heavily dependent on Russia for energy, with regions in the Middle East and Africa getting most of their wheat from Russia and Ukraine. Even if the supply chain remains intact and Russia’s exports are not affected by the sanctions, there are concerns that Mr. Putin could cut off supplies punitively.
Few Russian exports go directly to the United States, but disruptions anywhere could boost prices, perpetuating inflation that has already lasted longer than officials anticipated. The Federal Reserve has said it is preparing to raise interest rates, aiming to slow inflation by reducing spending, allowing supply to catch up. But higher rates will also slow growth, and doing so while the market is in decline risks prolonging the downturn.
US stocks have been rocking with a correction for weeks, as investors fretted over how quickly the Federal Reserve would raise interest rates. The S&P 500 index, the US benchmark, fell several times past the 10% threshold in intraday trading but rallied late in trading. Tech stocks in particular have fallen far from their highs, and the tech-heavy Nasdaq composite is 18.8% below its November record. It’s coming down suggests an even worse shift in Wall Street sentiment: a bear market, or 20% drop.
Anton Troianovski contribution report.
https://www.nytimes.com/2022/02/24/business/economy/stock-market-today.html Asian stocks fell on the news of the invasion, prolonging the global decline.