Shares fell on Friday in Asia after a retreat on Wall Street as growing concerns over the possibility of Russia invading Ukraine rattled global financial markets.
Benchmarks were moderately lower in Tokyo, Hong Kong, Sydney, Seoul and Sydney.
On Thursday, the S&P 500 fell 2.1%, its biggest decline in two weeks, the Dow Jones Industrial Average fell 1.8% and the Nasdaq composite fell 2.9%. The losses wiped out weekly gains for major indexes.
The sell-off came as President Joe Biden warned that Russia, which is believed to have built up some 150,000 military forces near Ukraine’s borders, could invade within days.
Dignitaries rushed to find solutions, but suspicions between East and West only grew, as NATO allies dismissed Russian claims it was withdrawing troops from drills which had fueled fears of an attack.
The Ukraine crisis has weighed on markets for weeks, adding to market volatility. Russia is a major energy producer and if it invades Ukraine and other governments react with economic sanctions, it could prevent access to around 7% of the world’s energy market, said Tom Martin , Senior Portfolio Manager at Globalt Investments.
Without any clear near-term resolution, the uncertainty of a potential invasion is enough to keep market participants from avoiding risky assets, while flocking to safe havens,” said IG’s Yeap Jun Rong in a comment.
Japan reported on Friday that its core inflation rate, excluding volatile energy and food costs, rose 0.2% in January, well below decades-high figures in most major economies and well below the Bank of Japan’s 2% target.
Tokyo’s Nikkei 225 lost 0.5% to 27,094.16, while Hong Kong’s Hang Seng fell 0.6% to 24,647.07. The Kospi in Seoul fell 0.1% to 2,739.93. Australia’s S&P/ASX 200 fell 0.6% to 7,249.50.
The Shanghai Composite was virtually unchanged at 3,468.83.
About 85% of stocks in the benchmark S&P 500 index closed lower on Thursday. It fell 94.75 points to 4,380.26 and now sits 8.7% below the all-time high it hit on January 3.
The Dow Jones slipped 622.24 points to 34,312.03, while the tech-heavy Nasdaq lost 407.38 points to 13,716.72.
Shares of smaller companies also fell sharply. The Russell 2000 Index fell 2.5% to 2,028.09.
The technology sector was the biggest drag on the index, along with communications stocks and companies that rely on consumer spending. Microsoft fell 2.9%, Facebook parent company Meta fell 4.1% and Nike fell 2.5%.
But some companies have done well on the back of strong earnings. Walmart, the world’s largest retailer, rose 4% after reporting strong financial results in the fourth quarter. Cisco Systems, which makes routers, gained 2.8% after raising its profit forecast for the year.
Bond yields fell and dragged banks down. The 10-year Treasury yield fell to 1.97% from 2.04% on Wednesday evening. Bank of America slipped 3.4 percent.
The price of gold, traditionally a safe haven in times of geopolitical uncertainty, rose 1.6%.
Tensions over Ukraine are adding to investors as the Federal Reserve prepares to raise interest rates to combat the persistent rise in inflation, which has hit a 40-year high.
Companies have had to deal with supply chain issues and higher costs by raising the prices of finished products for consumers. Many also warned investors that inflation would undermine their profits, sales and overall operations.
So far, consumers do not appear to have held back their spending due to rising prices. The Commerce Department said retail sales jumped 3.8% in January as the threat of the omicron variant of COVID-19 faded.
In other trading Friday, U.S. benchmark crude fell 67 cents to $91.09 a barrel in electronic trading on the New York Mercantile Exchange. It fell 2% on Thursday, while the price of natural gas fell 4.9%.
Brent crude, the international price standard, fell 52 cents to $92.45 a barrel.
The US dollar fell from 114.93 yen to 115.16 Japanese yen. The euro climbed to $1.1372 from $1.1365.
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