Asia equities slump on Ukraine developments

Putin moves in ‘peacekeepers’ into Eastern Ukraine

The incipient rally seen yesterday has been snuffed out overnight after President Putin pushed back on US summit hopes and then recognised the two breakaway areas of the Ukraine and began “security” operations there. That dose of reality in dealing with the Russian President saw European stocks slump and with US markets closed, US index futures tumbled. Dow futures fell by 1.40%, S&P 500 futures by 1.80%, and Nasdaq futures by 2.50%, or thereabouts.

 

Despite the US holiday affecting liquidity, I believe the result would have been the same anyway and the selloff continues in Asia today with US index futures around 0.40% lower. Japan’s Nikkei 225 has slumped by 2.0% this morning, with the South Korean Kospi falling by 1.45%.

 

China markets are also under pressure, compounded by ongoing tech clampdown rumours and property sector rollover risk this week. The Shanghai Composite is down 1.25% with the more tech-centric CSI 300 tumbling by 1.60% and the Hang Seng slumping 2.30% into the red.

 

Singapore has eased by 0.75% with Taipei falling by 1.35%, while Kuala Lumpur is down by 0.85%. Jakarta is a relative outperformer, down just 0.20% today, while Bangkok has retreated by 1.55% and Manila by 0.75%.  Australia’s ASX 200 and All Ordinaries are 1.25% lower.

 

With geopolitics subsuming data this week, it is hard to construct a bullish case for equities in the days ahead. European markets are likely to take more fright at the Russia “security operations” in Eastern Ukraine and fall once again this afternoon. Meanwhile, the threat of sanctions and an oil price that is screaming USD 100 a barrel will also keep US equity markets on the back foot.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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