Asian stocks mingled with Ukraine, sanctions, and energy concerns

TOKYO – On Monday, Asian actions were mixed, with Western countries tightening sanctions against Russia and President Vladimir Putin escalating tensions by ordering Russian nuclear forces to be on high alert.

Japanese benchmark Nikkei 225 recouped early gains, rising nearly 0.1% in morning trading to 26,493.03. The Australian S & P / ASX 200 rose 0.5% to 7,032.90. South Korean Kospi rose 0.2% to 2,682.98. Hong Kong’s Hang Seng fell 0.9% to 22,567.84. while the Shanghai Composite lost 0.5% to 3434.22.

World stock markets have been turbulent since Russia invaded Ukraine last week. Shares have risen sharply amid uncertainty over how much Russia’s invasion will boost inflation, especially oil and natural gas prices, and tighten the global economy.

Although the Asian region is unlikely to suffer direct damage from the war in Ukraine, higher energy prices are likely to be devastating, especially for oil-importing countries such as Japan.

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Japan has joined the West in sanctions against Russia, joining international efforts to block some Russian banks in the global SWIFT payment system. Prime Minister Fumio Kishida also said Japan plans to freeze Putin’s assets.

“As relations between Russia and Europe deteriorate, this calls into question whether Russia’s trade relations with China will be strengthened,” said Yep Jun Rong, IG’s market strategist in Singapore.

Russian forces have faced strong opposition from Ukraine’s defenders, and US officials believe the invasion was more severe than the Kremlin imagined.

On the Wall Street, the S&P 500 ended last week, rising 2.2% and gaining its first weekly gain in three weeks, adding 95.95 points to 4,384.65. The Dow Jones Industrial Average rose 834.92 points, or 2.5%, to 34,058.75. The Nasdaq ID increased 221.04 points, or 1.6%, to 13,694.62 after fluctuations between modest gains and losses. The Russell 2000 index rose 44.92 points, or 2.3%, to 2,040,923.

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Uncertainty over interest rates and inflation is heightening concerns in the economy, which has suffered for two years from the coronavirus pandemic and its restrictions on travel, trade and economic activity.

Adding concern is also the fact that the US Federal Reserve has proposed raising short-term interest rates next month to twice their usual increase, making it the first rate increase since 2018. Higher rates in the US tend to put downward pressure on all types of investments, and can have global implications.

In energy trade, U.S. benchmark oil rose $ 4.39 to $ 95.98 a barrel. On Friday, it fell 1.3% to $ 91.59 a barrel. Recently, oil prices have briefly exceeded $ 100 a barrel amid fears that conflict and future sanctions could disrupt supplies. Brent crude, an international standard, jumped $ 4.24 to $ 102.17 a barrel.

In foreign exchange trading, the US dollar fell to 115.55 Japanese yen from 115.56 yen. The euro was worth $ 1.1173 compared to $ 1.1271.

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