Oil prices jump, stocks fall as Russian troops enter Ukraine | Region

BANGKOK (AP) — Oil prices jumped nearly 5% and stock prices fell after Russian President Vladimir Putin ordered forces into breakaway regions of eastern Ukraine, bringing an invasion closer. so dreaded.

Russia is a major energy producer and tensions around Ukraine have led to wild swings in volatile energy prices, in addition to the inevitable risks of a wider conflict.

Oil prices had already recently hit their highest level since 2014. As of Tuesday morning, benchmark U.S. crude rose 4.9% to $94.64 a barrel in electronic trading on the New York Mercantile Exchange. The price of Brent crude, the standard for international oils, jumped 3.9% to $99.07 a barrel.

U.S. markets were closed Monday for Presidents Day, but European and Asian markets shook as Putin worked to secure Russia’s hold on rebel Ukrainian regions, adding to fears of a full-scale invasion. .

These actions have undermined hopes of averting a conflict that could cause mass casualties, power shortages on the continent and economic chaos around the world.

The United States and the European Union condemned Russia and prepared to impose sanctions on the administration and supporters of President Vladimir Putin. Western powers fear Russia is using skirmishes in Ukraine’s eastern regions as a pretext to attack democracy, which has defied Moscow’s attempts to bring it back into its orbit.

Russian President Vladimir Putin received no support from members of the UN Security Council during an emergency meeting on Monday evening for his actions to bring separatists in eastern Ukraine under control from Moscow.

The German DAX fell 0.9% to 14,604.98 and the CAC 40 in Paris lost 0.6% to 6,747.97. Britain’s FTSE 100 fell 0.4% to 7,452.18.

US futures were down sharply, with the contract for the S&P 500 down 1% and the futures contract for the Dow Industrials 0.9% lower.

The biggest losses so far have been in Russia, where the MOEX index fell 5.4% early Tuesday after losing nearly 11% on Monday.

The ruble was 2.5% lower.

“The current situation is tightening financial conditions for Russian companies, destabilizing markets and reducing business predictability,” FxPro’s Elena Nazarova said in a commentary.

In Asian trading, Tokyo’s Nikkei 225 fell 1.7% to 26,449.61 while Hong Kong’s Hang Seng regained lost ground to close 2.7% lower at 23,520, 00. South Korea’s Kospi fell 1.4% to 2,706.79 and the Shanghai Composite Index fell 1% to 3,457.15. Australia’s S&P/ASX 200 fell 1% to 7,161.30.

The turmoil in Ukraine has heightened uncertainty at a time when investors are already worried about how the world’s central banks, particularly the US Federal Reserve, will act to counter soaring inflation as coronavirus outbreaks coronaviruses fueled by the highly contagious omicron variant are clouding the outlook for many countries.

The rise in oil prices complicates this situation.

“Indeed, a full-scale invasion of Ukraine by Russia will leave many central banks in the lurch,” Oanda’s Jeffrey Halley said in a report. “The immediate impact would be an exacerbation of endemic inflationary pressures globally as oil hits over $130.00 a barrel,” he said.

Treasury yields have fallen as investors shift money to the safety of US bonds. The 10-year Treasury yield, which affects rates on mortgages and other consumer loans, was 1.90% early Tuesday, down from 1.93% on Monday.

In currency trading, the US dollar rose to 114.80 Japanese yen from 114.74 yen on Monday night. The euro fell from $1.1312 to $1.1317.

US stocks closed a week of volatile trading with a large selloff on Friday.

The S&P 500 and the Dow Jones Industrial Average both fell 0.7%. The Nasdaq composite bore the brunt of the selloff, slipping 1.2%. Small company stocks also fell, with the Russell 2000 Index down 0.9%.

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Steve R. Hansen