Major Asian indices held bearish state on Monday inching down sharply after war intension escalated with Beijing’s ambiguous comments on war stance and as U.S. threatened to put embargo on Russian oil.
The CSI300, HSI, KOSPI, SET and TOPIX is down by 3.19%, 3.87%, 2.29%, 2.69% and 2.88% respectively.
Stoxx 600 dipped more than 3% while U.S. futures Dow Jones down by 1.48% and S&P by 1.54%.
The Biden Administration is considering embargo on Russian oil imports in the U.S. without the participation of allies in Europe, for the time being. The movement could further elevate inflationary pressure as oil surged to record highs seen in 2008.
Treasuries were little changed and the dollar advanced. Gold momentarily touched $2,000 an ounce.
“For the U.S. economy, we now see stagflation, with persistently higher inflation and less economic growth than expected before the war,” Ed Yardeni, president of Yardeni Research, wrote in a note. “For stock investors, we think 2022 will continue to be one of this bull market’s toughest years.”
Meanwhile, Russian companies will be allowed to pay foreign creditors in rubles, according to a decree signed by President Vladimir Putin on Saturday in an attempt to stave off defaults enforcing capital controls.
Crude oil maintain historic highs with WTI at $122 per barrel while Brent is trading at $124 per barrel.
