Asian shares climb amid Russia-Ukraine talks and oil worries

Ordinary Russians facing likely higher prices and crimped foreign travel due to Western sanctions.

By AP

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AP
AP

Published: Tue 1 Mar 2022, 10:03 AM

Asian shares mostly rose Tuesday as global investors eyed talks aimed at ending the Russian military assault on Ukraine, which so far have yielded just an agreement to keep talking.

Benchmarks were higher in early trading in Tokyo, Sydney and Shanghai. Hong Kong declined and markets were closed in South Korea for a holiday. US futures edged lower and oil prices rose.


Surging oil prices and increasing financial pressure from the US and allies on Russia, one of the world's largest energy exporters, for its attack on Ukraine are adding to uncertainty about the global economic outlook.

Russian forces shelled Ukraine’s second-largest city on Monday, rocking a residential neighborhood, and closed in on the capital, Kyiv, in a 40-mile convoy of hundreds of tanks and other vehicles.


“The end game continues to elude. While the ceasefire talks at the Belarus-Ukraine border ended, the military fires certainly have not ended by any means alongside sanctions being raised further,” Tan Boon Heng at Mizuho Bank in Singapore said in a commentary.

Japan's benchmark Nikkei 225 gained 1.4 per cent in afternoon trading to 26,893.98. Australia's S&P/ASX 200 surged 0.7 per cent to 7,096.50. Hong Kong's Hang Seng slipped 0.4% to 22,628.17, while the Shanghai Composite added 0.2 per cent to 3,469.90. Trading was closed in South Korea for a national holiday.

“Asian equities were higher on Tuesday mirroring a mild rebound on Wall Street and following talks between Russia and Ukraine. The market’s focus will continue to be on geopolitical tensions, at least in the short term,” Anderson Alves of ActivTrades said in a report.

The value of the Russian rouble plunged to a record low after Western countries moved to block some Russian banks from a key global payments system. On Monday, the US Treasury Department announced more sanctions against Russia's central bank.

Governors and lawmakers in numerous US states, seeking to add to the financial squeeze on Russia, were taking steps to pull state pension and treasury funds out of investments in Russian-held entities or Russian companies supporting the military action.

Early Tuesday, the ruble was down 3.2 per cent at 104.51 to the dollar. The Moscow Stock Exchange was closed.

Ordinary Russians facing likely higher prices and crimped foreign travel due to Western sanctions lined up at banks and ATMs on Monday. Deeper economic turmoil may loom if price shocks and supply-chain issues cause Russian factories to shut down due to lower demand.

On Wall Street, the S&P 500 fell as much as 1.6% Monday and then recouped much of that to finish 0.2% lower at 4,373.94. The Dow Jones Industrial Average fell 0.5% to 33,892.60 and the Nasdaq composite rose 0.4% to 13,751.40, recovering from a 1.1% slide.

The Russell 2000 index of small company stocks gained 0.4 per cent to 2,048.09.

The Biden administration said Germany, France, the UK, Italy, Japan, European Union and others will join the US in hitting Russia’s central bank.

Markets already were on edge before Russia’s attack, worried about upcoming hikes in interest rates by the Federal Reserve, which would be the first since 2018.

The crisis in Ukraine is raising expectations that the Federal Reserve may have to adopt a gentler approach to raising interest rates in order to fight inflation.

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