Asia stocks tumble to 16-month lows after Ukraine nuclear complex fire

SINGAPORE, March 4 (Reuters) – Asian equities and the euro slumped on Friday after information of a hearth close to a Ukraine nuclear facility following preventing with Russian forces heightened investor fears in regards to the escalating battle and despatched oil costs increased.

The danger-off urge for food battered markets throughout the area, with European bourses set for a weak open as Euro Stoxx 50 futures whereas German DAX futures shed 2.6% and FTSE futures misplaced 1.4%.

A fireplace that broke out in a coaching constructing close to the Zaporizhzhia nuclear energy plant, the biggest of its variety in Europe, throughout intense preventing between Russian and Ukrainian forces has since been extinguished, authorities stated on Friday. learn extra

Whereas that has helped ease a few of the preliminary panic that hit markets earlier within the day, traders stay extraordinarily anxious in regards to the battle.

“Markets are fearful about nuclear fallout. The danger is that there’s a miscalculation or overreaction and the conflict prolongs,” stated Vasu Menon, government director of funding technique at OCBC Financial institution.

MSCI’s broadest index of Asia-Pacific shares ex-Japan (.MIAPJ0000PUS) tumbled as a lot as 1.6% to 585.5, the bottom degree since November 2020, taking the year-to-date losses to 7%.

“Markets do not need a contagion impact and extra European international locations impacted by the disaster,” stated Menon. “If traders wish to purchase, they should have a robust and long-term danger urge for food.”

Inventory markets throughout Asia had been in a sea of pink, with Japan (.N225) dropping 2.5%, South Korea 1.1%, China (.SSEC) 0.8% and Hong Kong 2.5% whereas commodities-heavy Australia (.AXJO) was down 0.6%.

S&P 500 futures shed 0.3% and Nasdaq futures fell 0.41%, paring sharp losses from early buying and selling. In a single day, Wall Road ended decrease as traders remained on edge over the Ukraine disaster, whereas rising costs of commodities additionally weighed on market sentiment.

Traders sought refuge in safe-haven U.S. Treasuries, sending yields on benchmark 10-year yields as a lot as 14 foundation factors decrease to 1.7%. They later inched again as much as 1.79%.

Oil costs jumped on Friday after ending regular a day earlier, with the market additionally centered on whether or not the OPEC+ producers, together with Saudi Arabia and Russia, would improve output from January.

Brent crude futures for Might rose to as a lot as $114.23 a barrel and had been final up 0.5% at $111. The contract fell 2.2% on Thursday.

There was no let-up in different commodities additionally, with Chicago wheat futures leaping almost 7%, taking the weekly acquire to greater than 40% on provide aspect worries.

On the financial knowledge entrance, the U.S. employment report on Friday is predicted to point out one other month of sturdy job progress, with the Omicron COVID-19 variant wave of infections considerably diminished.

Federal Reserve Chair Jerome Powell on Thursday repeated his feedback that he would again an preliminary quarter share level improve within the financial institution’s benchmark charge.

Economists stated increased rates of interest had been wanted to tame excessive inflation.

“Well timed decided motion from central banks is required to settle inflationary expectations as provide chain disruptions and rising vitality costs enhance present inflation. The conflict has intensified these forces,” Invoice Evans, chief economist at Westpac, stated in a notice.

“Central banks have the duty to make sure that excessive inflationary expectations don’t change into embedded within the system – risking a wage/value spiral. Regardless of the uncertainties of the conflict this process shouldn’t be compromised,” he stated.

Gold costs additionally rose on Friday, eyeing their greatest weekly acquire since Might 2021. Spot gold edged up 0.1% to $1,936.9.

In foreign money markets, the euro misplaced additional floor and was set for its worst week versus the greenback in 9 months. It fell 0.3% to $1.10320 and traded above the day’s lows. It has misplaced about 1.8% this week, which might be the euro’s worst week since June 2021.

Reporting by Anshuman Daga; Enhancing by Edwina Gibbs and Sam Holmes

: The Thomson Reuters Trust Principles.