Asia report: Markets make small gains as investors watch Ukraine developments

Most stock markets managed modest gains in Asia on Monday, as investors digested the latest news from Russia’s invasion of Ukraine and the ensuing sanctions on Russia from the West.

In Japan, the Nikkei 225 was up 0.19% at 26,526.82, as the yen weakened 0.01% against the dollar to last trade at JPY 115.56.

It was a positive day for the benchmark’s major components, with automation specialist Fanuc up 0.38%, fashion firm Fast Retailing rising 0.13%, and technology conglomerate SoftBank Group 1.1% firmer.

The broader Topix index was ahead 0.57% by the end of trading in Tokyo, closing at 1,886.93.

On the mainland, the Shanghai Composite gained 0.32% to 3,426.31, and the smaller, technology-heavy Shenzhen Composite was 0.35% firmer at 2,318.09.

South Korea’s Kospi was 0.84% higher at 2,699.18, while the Hang Seng Index in Hong Kong was the region’s odd one out, slipping 0.24% to 22,713.02.

The blue-chip technology stocks were on the front foot in Seoul, with Samsung Electronics up 0.28% and SK Hynix rising 0.41%.

Russia continued its assault on Ukraine over the weekend, with its forces reportedly surrounding - but so far failing to take - the capital Kyiv.

Vladimir Putin announced on Sunday that he had put Russia’s nuclear deterrent on “special alert”, in response to economic sanctions being placed on his country.

A number of Russian banks were now being stripped of their ability to use the SWIFT global interbank system, and Russian aircraft were being banned from the airspace of more places.

Representatives from both Ukraine’s and Russia’s governments were set to meet near the Belarus border with Ukraine on Monday for talks over the current situation, although Ukraine president Volodymyr Zelenskyy said he was not expecting much substance to come from them.

“The Russian ruble plunged by almost 30% to trade at a new record low of 106 ruble per dollar after Western countries blocked a list of Russian banks from the SWIFT global payment system,” said Exinity chief market strategist Hussein Sayed.

“Fears that oil supplies could be disrupted sent Brent crude 5% higher and European gas futures rose by more than 60%.

“The decision to cut Russia from the global payment system could possibly halt gas supplies to Europe and lead to dangerous economic consequences on the continent and the rest of the world.”

Sayed said investors were still trying to work out what might happen next, and act accordingly.

“Dip buyers emerged on Thursday and Friday, just one day after the large-scale military attack, but now they are seeking shelter again after they realised that this war is not a one-day event and outcomes are hard to predict.”

Oil prices continued their strong upward trajectory at the end of the Asian day, with Brent crude last up 5.08% at $102.90 per barrel, and West Texas Intermediate ahead 4.43% at $95.65.

In Australia, the S&P/ASX 200 was up 0.73% at 7,049.10, while across the Tasman Sea, New Zealand’s S&P/NZX 50 advanced 0.46% to 11,977.77.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.2% at AUD 1.3853, and the Kiwi retreating 0.14% to NZD 1.4846.