Asia report: Stocks fall further on Ukraine, energy concerns

Stocks were once again weaker in Asia on Tuesday, as investors continued to exercise reticence over ongoing violence amid Russia’s unprovoked invasion of Ukraine.

In Japan, the Nikkei 225 was down 1.71% at 24,790.95, as the yen weakened 0.32% against the dollar ato last trade at JPY 115.69.

Robotics specialist Fanuc was up 1.14%, while among the benchmark’s other major components, Uniqlo owner Fast Retailing lost 2.68% and technology investing giant SoftBank Group tumbled 4.95%.

The broader Topix index was 1.9% weaker by the end of trading in Tokyo, closing at 1,759.86.

On the mainland, the Shanghai Composite was 2.35% lower at 3,293.53, and the smaller, technology-centric Shenzhen Composite lost 2.89% to 2,139.67.

South Korea’s Kospi was off 1.09% at 2,622.40, while the Hang Seng Index in Hong Kong was 1.39% weaker at 20,765.87.

Seoul’s blue-chip technology stocks were on the back foot, with Samsung Electronics down 0.86%, and SK Hynix losing 1.26%.

The losses in Asia came on the back of another negative session on Wall Street overnight, as investors tried to make sense of the possible fallout from the invasion of Ukraine.

Oil prices remained well into the three digits by the time Asia went to bed, having jumped on Monday after Washington floated the prospect of banning oil and gas imports from Russia in response to its invasion and aggression in Ukraine.

Countries such as Germany and the Netherlands, which rely heavily on Russian natural gas for energy, were reportedly rebuking the idea of a coordinated ban.

Brent crude futures were last up 2.8% at $126.66 per barrel on the ICE, and West Texas Intermediate was 2.55% firmer at $122.45.

At the start of the year, Brent futures were hovering around the $70 per barrel level, and rocketed towards $140 per barrel briefly on Monday - prices not seen since the height of the global financial crisis in 2008.

“Just like the American stock market indices, major Asian-Pacific stock markets have also been under fire as investors are closely looking at how the Russia-Ukraine war could impact the growth of economies around the world,” said AvaTrade chief market analyst Naeem Aslam.

“Oil prices have rallied over the past few days, rising above $130 per barrel because of the risk of global oil supplies potentially taking a hit if sanctions are imposed on Russia’s oil.”

Aslam said gains were capped by Germany’s stance that it was not looking to curb imports of energy from Russia.

“Likewise, even if the United States and some of its allies place a ban on Russian oil, these countries are looking to Gulf oil-rich countries to fill the gap.”

In Australia, the S&P/ASX 200 was off 0.83% at 6,980.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 1.41% at 11,744.95.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.31% weaker at AUD 1.3711, while the Kiwi strengthened 0.2% to NZD 1.4625.