Asia report: Markets fall on Ukraine developments

Markets closed weaker in Asia on Tuesday, as investors reacted to news overnight that Russian president Vladimir Putin had ordered troops into two rebel-held regions in eastern Ukraine.

In Japan, the Nikkei 225 was down 1.71% at 26,449.61, as the yen weakened 0.17% against the dollar to last trade at JPY 114.93.

Of the major components on the benchmark index, robotics specialist Fanuc was down 0.51%, Uniqlo owner Fast Retailing was off 1.63%, and technology giant SoftBank Group was 0.12% lower.

The broader Topix index was 1.55% weaker by the end of trading in Tokyo, closing at 1,881.08.

On the mainland, the Shanghai Composite was off 0.96% at 3,457.15, and the smaller, technology-heavy Shenzhen Composite lost 1.23% to 2,297.30.

South Korea’s Kospi fell 1.35% to 2,706.79, while the Hang Seng Index in Hong Kong tumbled 2.69% to 23,520.00.

Internet conglomerate Alibaba Group was 3.05% lower in the special administrative region, after Bloomberg reported that authorities in Beijing had ordered banks and state-controlled companies to report exposure to its financial affiliate Ant Group.

Other technology plays in Hong Kong were weaker as well, with Meituan sliding 5.1% and Tencent slipping 0.13%.

The blue-chip tech stocks were also on the back foot in Seoul, with Samsung Electronics down 1.08% and SK Hynix losing 1.15%.

“After last night’s laying down of the gauntlet by Putin, the ball is now firmly in NATO’s court, with the very real prospect that sanctions may not be enough, although they will be very much the starting point, as Europe stands on what could be the brink of war,” said CMC Markets chief market analyst Michael Hewson of the global situation on Tuesday morning.

“If NATO, the US, UK and more importantly EU nations can’t coalesce around a significant and wide-ranging sanctions response, and in the case of NATO, draw a definitive line in the sand, in the wake of last night’s events, then you must wonder what would prompt them to, as dictators rarely stop if you appease them.

“Oil prices have reacted accordingly, with Brent prices pushing back up towards last week’s high, on the way to the $100 a barrel level which now seems only a matter of time.”

Indeed, oil prices were stronger as the region went to bed, with Brent crude last up 2.75% at $98.01 per barrel, and West Texas Intermediate rising 2.5% to $93.88.

In Australia, the S&P/ASX 200 was 1% weaker at 7,161.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.34% to 12,114.63.

The down under dollars were stronger on the greenback, with the Aussie last ahead 0.49% at AUD 1.3840, and the Kiwi advancing 0.61% to NZD 1.4835.