Asian market kicked off first day of the week with sharp declines and crude oil extended rally as gauge for geopolitical risk rise over tensions in the Ukraine.
The CSI300, HSI, KOPSI and TOPIX fell by 0.29%, 1.35%, 1.96% and 2.01% respectively. MSCI broad market Asian index ex Japan fell by 0.92%.
Tensions elevated over Russia’s military buildup near the Ukrainian border and U.S.’s warning on imminent invasion.
A “flight to safety for all markets will be the first order” of fallout from any potential invasion of Ukraine, said Wai Ho Leong, strategist at Modular Asset Management in Singapore to Bloomberg.
“The impact on inflation will go beyond oil and gas,” he said. “For the rest of the world, it is potentially a massive food shock — as Ukraine is a major exporter of grain — mainly corn and wheat.”
Crude oil futures gained sharply with WTI futures up by 1.44% to $94.45 per barrel while Brent inched up by 1.21% to $95.60 per barrel.