Asia Stocks Tumble Most in a Year as Russia Attacks Ukraine
Fresh Losses Hit Asia Stocks as Putin Orders Military Operation
(Bloomberg) -- Stocks in Asia Pacific extended losses on heightened tensions over Ukraine, as Russian forces attacked targets across Ukraine after President Vladimir Putin ordered an operation aimed at demilitarizing the country.
The MSCI Asia Pacific Index tumbled 2.8% in worst day in a year after the incursion, which prompted Ukraine’s foreign minister to warn of a “full-scale invasion.” U.S. President Joe Biden said he will announce further punishments on Russia in response and meet his Group of Seven counterparts.
Benchmarks in Hong Kong, Singapore and India each posted declines of more than 3%. Financials and technology stocks were among those weighing most on the regional gauge, with the selloff in Chinese internet giants heightened ahead of Alibaba Group Holding Ltd.’s earnings release Thursday.
“The brinksmanship on display is likely to escalate into unintended actions, which the U.S. has alluded to being false-flag operations for Russia to justify further military action,” said Justin Tang, head of Asian research at United First Partners. “Look for traditional havens like gold, USD, JPY and treasuries to outperform.”
Asian stock traders remain on tenterhooks as tensions escalate between Russia and the West. The geopolitical risks come as the region’s earnings season progresses and amid fresh regulatory concerns putting further pressure on China’s already beaten-down tech shares.
Nasdaq 100 Index futures tumbled in Asian trading hours, pointing to the equity gauge’s first bear market since March 2020. Meanwhile, the Kospi slid more than 2% as South Korea’s central bank warned that inflation will stay above 3% as it maintained the key interest rate.
“Most Asian economies are net importers of mineral fuels,” said Zhikai Chen, head of Asian equities at BNP Paribas Asset Management. “So the risk to Asian equities is mainly via elevated commodity prices due to a potential interruption in its exports and the possibility of Russia restricting outgoing energy.”
SECTORS TO WATCH
- Asian chipmakers including SK Hynix fell on worries that chip-production costs may rise with military actions in Ukraine, which is a major supplier of key raw material gases
- Coal miners in Indonesia climbed to their highest in years on Thursday and energy producers rose regionally as commodity prices soared on escalating tensions between Russia and Ukraine
- Defense-related stocks including Ishikawa Seisakusho surged on the attacks, while Asian airline shares dropped
- Chinese aluminum stocks including Yunnan Aluminium rallied after prices of the metal reached a record high
- Australian mining companies fell after Rio Tinto flagged that cost pressures could affect business in 2022
- Japanese game companies Bandai Namco and Kadokawa surged as their latest title Elden Ring received stellar reviews from critics ahead of its release
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MARKETS AT A GLANCE
- MSCI Asia Pacific Index down 2.8%
- Japan’s Topix index down 1.2%; Nikkei 225 down 1.8%
- Hong Kong’s Hang Seng Index down 3.2%; Hang Seng China Enterprises down 3.4%; Shanghai Composite down 1.7%; CSI 300 down 2%
- Taiwan’s Taiex index down 2.6%
- South Korea’s Kospi index down 2.6%; Kospi 200 down 2.6%
- Australia’s S&P/ASX 200 down 3%; New Zealand’s S&P/NZX 50 down 3.3%
- India’s S&P BSE Sensex Index down 4.7%; NSE Nifty 50 down 4.8%
- Singapore’s Straits Times Index down 3.5%; Malaysia’s KLCI Index down 0.8%; Philippine Stock Exchange Index down 2.1%; Jakarta Composite Index down 1.5%; Thailand’s SET Index down 2%; Vietnam’s VN Index down 1.2%
ADVANCERS
- Cimic surged 33% after telling shareholders not to take any action on a takeover proposal from Hochtief Australia, whose parent earlier said its Australian unit will make an unconditional and final takeover bid to buy the rest of the Cimic Group
- Perseus advanced 12% in Sydney after the miner reported a surge in its fiscal half-year net income and maintained its full-year targets
- Japan’s JMDC rose 2.1%, after Omron agreed to buy a stake of about one-third in the company from Noritsu Koki, which surged 23%
DECLINERS
- SenseTime slumped 12% after Hang Seng Indexes Co. announced the firm’s weighting in the Hang Seng Tech Index will be lower than previously announced
- Celltrion sank 5.9% after South Korea confirmed that it halted new supply of its Covid treatment Regkirona, saying that it was shown to be less effective to treat the omicron variant
- Acotec Scientific fell 3.4% in Hong Kong as the lockup period for cornerstone investors expired
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