Ukraine latest: US to redeploy Europe-based troops to Nato’s eastern flank

Muted markets reaction in Asia after Ukraine-inspired correction in US

Markets took a breather in Asia on Wednesday after a sell-off spurred by concerns over Ukraine pushed the S&P 500 into a correction.

In morning trading Hong Kong’s Hang Seng index was up 0.1 per cent while China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks rose 0.3 per cent. Markets in Japan were closed for a national holiday.

The minor moves in Asia came after the S&P 500 closed 1 per cent lower, putting it in correction territory after Russia’s president Vladimir Putin directed his military to enter Ukraine’s rebel-held Donetsk and Luhansk regions.

That move was followed by a flurry of sanctions from western nations, but markets on Wednesday in Asia were little moved by the response.

“There has been a quite muted market reaction to the announcements of sanctions on Russia by the US and Europe,” said Robert Carnell, chief Asia strategist at ING. Carnell noted US equities had posted losses, but added that the falls “were small compared to some recent moves”.

Oil prices were also steadying after wild swings on Tuesday that took Brent crude, the international benchmark, as high as $99.50 a barrel as traders grappled with the possibility of disrupted supply from Russia. On Wednesday the oil benchmark was trading flat at $96.81.

Back to top

What to watch in Asia

Hong Kong residents queue in the rain to be tested for the coronavirus © REUTERS

Hong Kong: The city is to announce its 2022-23 budget while battling its worst outbreak of the coronavirus pandemic, brought on by the Omicron variant. Financial secretary Paul Chan is expected to report a smaller deficit than had been predicted for the past year and to assist businesses and the unemployed with a fresh round of consumption-voucher handouts. Economists have downgraded Hong Kong growth forecasts citing its restrictive “zero-Covid” strategy and doubts over when the city might reopen borders to China and the rest of the world.

Amazon: India’s Supreme Court is to hear Amazon’s challenge to the sale of retailer Future Group to Mukesh Ambani’s Reliance Industries. Amazon has launched a case at the Singapore International Arbitration Centre, citing its 2019 investment in a Future Group subsidiary. In January, a month after India’s antitrust regulator suspended its earlier approval of Amazon’s investment in the company, the Delhi High Court stayed the proceedings at the SIAC.

Company earnings: OCBC, Galaxy Entertainment, Lenovo.

Back to top

Blinken cancels meeting with Russian foreign minister

Antony Blinken, US secretary of state, said he cancelled a planned meeting this week with Sergei Lavrov, Russia’s foreign minister, in the wake of Vladimir Putin’s decision to send troops into the Donbas region in eastern Ukraine.

Speaking alongside Blinken at a press conference, Ukraine’s foreign minister Dmytro Kuleba welcomed the US decision to impose sanctions on Russia.

“The world must respond with all its economic might to punish Russia for the crimes it has already committed. Ahead of the crimes it plans to commit, hit Russia’s economy now and hit it hard,” Kuleba said in Washington.

While the door for US-Russia diplomacy appears to have closed, Kuleba said Ukraine would “utilise every tool of diplomacy to deter Russia” and prevent escalation. “If that fails, Plan B is to fight for every inch of our land, and every city and every village,” he added.

Back to top

US stocks enter correction while oil nears $100 a barrel on Ukraine tensions

US stocks fell, with the S&P 500 index dropping into a correction, while oil prices neared $100 a barrel on Tuesday after Russian president Vladimir Putin ordered troops into Ukraine.

The international crude oil benchmark Brent rose as high as $99.50 a barrel, the highest price since 2014, as traders weighed the possibility of disrupted supply from Russia. It later trimmed its gains to settle at $96.84 a barrel, up 3.5 per cent from the prior day.

The moves came after Putin directed his military to enter Ukraine’s rebel-held Donetsk and Luhansk regions, prompting Germany to halt the approval of the Nord Stream 2 natural gas pipeline and western powers to announce new sanctions against Moscow.

Wall Street’s benchmark S&P 500 ended the day down 1 per cent to its lowest closing level since late 2021, led lower by energy and consumer discretionary stocks. The decline on Tuesday brought the index into a correction, or 10 per cent below its recent peak in January.

The technology-heavy Nasdaq Composite fell 1.2 per cent. The Stoxx Europe 600 share gauge slipped as much as 1.9 per cent, before recovering to close 0.1 per cent higher.

Volatility indices showed traders expected equity markets to continue to swing on headlines concerning Ukraine, with the Vix gauge of expected volatility on the S&P 500 trading at 28.9.

Back to top

US to redeploy Europe-based troops to Nato’s eastern flank

US defence secretary Lloyd Austin on Tuesday ordered the redeployment of Europe-based American troops and military assets to Nato’s northeastern and southeastern flanks.

A senior defence official said the forces would include 800 troops who would move from Italy to the Baltic region.

The US would relocate eight F-35 fighter jets from Germany to the eastern flank of Nato. The Pentagon will also move 20 attack helicopters from Germany to the Baltic region, and another 12 helicopters will move from Greece to Poland.

“These additional personnel are being repositioned to reassure our Nato allies, deter any potential aggression against Nato member states, and train with host-nation forces,” the defence official said.

The announcement came after US President Joe Biden announced new sanctions on Russia as he accused Vladimir Putin of beginning an “invasion” of Ukraine.

Back to top

Articles You May Like

Hundreds of funds to be stripped of ESG rating
Top Wall Street analysts pick these five stocks for the long term
Majority of Swiss voters want UBS-Credit Suisse ‘mega bank’ split up — poll
Badgers cause more trouble for trains, tunneling under tracks
Not-for-profit benefits top charity care levels for hospitals: report

Leave a Reply

Your email address will not be published. Required fields are marked *