Asian markets mixed as markets eye Ukraine and inflation worries
TOKYO — Asian stocks were mixed on Monday as worries about the pandemic, inflation and war in Ukraine weighed on market sentiment.
The Japanese reference Nikkei 225 NIK,
slipped 0.3%, while Australia’s S&P/ASX 200 XJO,
gained 0.3%. Hang Seng HSI from Hong Kong,
jumped 1.5% as the Shanghai Composite SHCOMP index,
slightly lower by 0.1%.
Kospi 180721 from South Korea,
increased by approximately 0.1%. Shares fell in Taiwan Y9999,
but increased slightly in Singapore STI,
and Indonesia JAKIDX,
Adding to concern over the economic impact of the pandemic, Shanghai entered a nine-day semi-lockdown. With China’s economic growth already slowing, this extreme measure could deepen unemployment, undermine consumer demand and further complicate already struggling global supply chains.
More broadly, the war in ukraine and inflation cloud the global outlook. the The movements of the Federal Reserve Raising interest rates to counter soaring prices is another concern in these uncertain times.
“As the new week approaches, geopolitical tensions and the prospect of Fed tightening could add volatility to markets. During the many rounds of talks, it showed that a peaceful resolution between Ukraine and Russia might be more difficult than expected,” said Yeap Jun Rong, market strategist at IG in Singapore.
The US Federal Reserve has signaled that it may continue to raise interest rates as a means of curbing inflation. Earlier this month, Fed officials raised their key rate by a quarter point, from near zero to a range of 0.25% to 0.5%.
Meanwhile, the war adds to worries about instability, energy prices and economic downturns in various countries. Over the weekend, Ukrainian President Volodymyr Zelensky accused the West of cowardice, pleading for fighter jets and tanks to help defend his country against invading Russian troops.
Russia has said its main goal in the conflict is to gain control of the eastern Donbass region, an apparent step back from its earlier larger goals but raising fears of a divided Ukraine. Earlier, President Joe Biden said in a speech that Russian President Vladimir Putin could not stay in power. White House aides rushed to downplay the comments, clarifying that Biden was not calling for “regime change.”
Wall Street ended last week with a moderate rally. The S&P 500 SPX,
rose 1.8% to 4,543.06 for a 0.5% gain for the week. The Dow DJIA,
gained 0.4% to 34,861.24. The Nasdaq COMP,
fell 0.2% to 14,169.30.
Oil prices have been volatile since the start of Russia’s war against Ukraine in February. Russia is the second largest exporter of crude. Energy prices were already highbut the conflict has raised concerns that a worsening supply crisis could further aggravate the persistent rise in inflation.
Japan imports virtually all of its oil, almost entirely from the Middle East. But the price spike will rattle an already fragile economy reeling from intermittent restrictions over the past two years to contain COVID-19 infections.
US Crude Benchmark CLK22,
fell $3.31 to $110.59 a barrel on Monday in electronic trading on the New York Mercantile Exchange. It rose 1.4% to settle at $113.90 a barrel on Friday evening. Brent Crude BRNK22,
the international price standard, fell $3.13 to $117.52 a barrel.
In currency trading, the US dollar USDJPY,
rose to 122.84 Japanese yen from 122.07 yen.