Asian stocks fall, oil prices rise on Ukraine invasion fears

BEIJING (AP) — Asian stock markets fell on Monday and oil prices rose amid concerns over a possible Russian invasion of Ukraine.

Tokyo’s benchmark fell by an unusually wide daily margin of 2.1%. Shanghai, Hong Kong and Seoul also fell. Global crude prices added more than $1 a barrel in a sign of concern over potential supply disruptions.

On Wall Street, the benchmark S&P 500 index fell 1.9% on Friday after the White House encouraged Americans to leave Ukraine within 48 hours. Other governments, including Russia, were pulling diplomats and their citizens out of the country.

Russia is one of the biggest oil producers. Any military action that disrupts supply could send shockwaves through energy markets and global industry.

“Markets are lagging in their awareness of the geopolitical risks posed by Russian military action against Ukraine,” Rabobank said in a statement.

The Nikkei 225 in Tokyo fell 2.1% to 27,117.18 at noon after falling 2.6% earlier.

The Bank of Japan made an offer for unlimited government bond purchases on Monday, aimed at curbing soaring long-term interest rates. Japan’s central bank has set the interest rate for buying 10-year government bonds at 0.25%. The offer elicited no bids, but still had the effect of lowering interest rates and likely reassured investors of continued market support.

The rate had risen on speculation that the BOJ might start to reverse its ultra-loose monetary policy in line with other central banks like the Federal Reserve. The latest decision underscores the BOJ’s intention to keep interest rates very low as inflation remains well below its 2% target rate. Japan’s benchmark interest rate has been held at minus 0.1% for years.

The Hang Seng in Hong Kong fell 1.2% to 24,594.21. The Kospi in Seoul fell 1.2% to 2,714.33.

The Shanghai Composite Index lost 0.6% to 3,441.23 while Sydney’s S&P-ASX 200 gained 0.2% to 7,234.20.

The Indian Sensex opened 1.7% lower at 57,153.59. New Zealand, Bangkok and Jakarta fell while Singapore remained unchanged.

Investors were already nervous about the Federal Reserve’s plans to scale back economic stimulus to quell inflation that is at its highest level in four decades and how quickly Europe and other central banks would follow.

The S&P 500 fell to 4,418.64 on Friday for its fourth weekly loss in the past six weeks after President Joe Biden’s national security adviser Jake Sullivan said the threat of a Russian attack was looming. “immediate enough” for Americans to leave Ukraine.

The Dow Jones Industrial Average fell 1.4% to 34,738.06. The Nasdaq composite fell 2.8% to 13,791.15.

Investors moved money into Treasuries, gold and other assets seen as safe havens.

The market price of a 10-year treasury note rose, pushing down its yield, or the difference between today’s price and the payout if held to maturity, to 1.91% versus 2.03% Thursday.

Treasury prices had fallen on expectations that the Fed would raise interest rates up to seven times this year. If the Fed succeeds in calming inflation, it would increase the purchasing power of the bond payment, making it a more attractive investment.

In energy markets, benchmark U.S. crude rose $1.31 to $94.41 a barrel in electronic trading on the New York Mercantile Exchange. The contract added $3.22 on Friday at $93.10. Brent crude, the price base for international oils, advanced $1.04 to $95.48 a barrel in London. It gained $3.03 the previous session at $94.44.

The dollar gained 115.48 yen from 115.27 yen on Friday. The euro fell from $1.1334 to $1.1346.


AP Business Writer Yuri Kageyama in Tokyo contributed.

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