On Tuesday, Asian stock indices fell as investors considered the ramifications of a possible Russian invasion of Ukraine.
After stock markets in the United States and Europe lost ground on Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4 percent in early regional activity.
The Nikkei in Japan was down 0.2 percent, while the S&P/ASX200 in Australia was down 0.32 percent.
Early in the day, Hong Kong’s Hang Seng Index fell 0.52 percent, while China’s CSI300 Index bucked the trend and rose 0.2 percent.
“This week, geopolitical risk will be the clear driver of market mood,” said Marcella Chow, JPMorgan Asset Management’s global markets strategist.
“We expect to see a flight to safety in gold, US dollars, and longer-term Treasuries if investors’ risk appetite is stifled.”
The Dow Jones Industrial Average sank 0.49 percent overnight, the S&P 500 fell 0.38 percent, and the Nasdaq Composite remained virtually unchanged, losing only 0.24 point.
On Monday, oil hit its highest level in seven years in US trading, owing to Russia-Ukraine tensions, although it fell somewhat in Asian trading.
The US cautioned on Monday that Russia may attack Ukraine at any time. Secretary of State Antony Blinken announced that the US embassy in Kyiv would be relocated to Lviv, citing the “dramatic acceleration of Russian soldiers’ buildup.”
“There are concerns about the likelihood of the largest military intervention in Europe since WWII,” said James Rosenberg, a financial adviser with EL&C Baillieu.
“So far, the market has only been keeping a close eye on things, and it does not appear to have had much of an influence. If Russia attacks Ukraine, this might change substantially.”
“Economic and financial penalties that will have huge and immediate implications on the Russian economy,” the Group of Seven leading economies (G7) warned.
MSCI Inc, a global index producer, said it was keeping an eye on events in Ukraine and access to the Russian stock market.
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