Hand and pen pointer, chart
As news of Ukrainian nuclear plants under attack filtered through in the early hours of Friday morning, Asian stocks slumped to a 16-month low.
Reports of a fire at a nuclear power plant in Ukraine amidst fierce fighting between Ukraine and Russian troops sent investors into a risk-off appetite. Whilst commodities enjoyed another strong session of gains following on from Thursday’s gains, Asian stocks and the Euro did not fare so well.
Stock markets throughout Asia closed Friday in a sea of red. Japan lost 2.4%, South Korea 1.2%, China 0.9% and Hong Kong 2.5%. Even commodities-heavy Australia was also not spared in the heavy risk-off session and closed 1% lower.
Meanwhile, in the US, the S&P 500 futures tempered some early losses, however still down closed down 0.6%. The Nasdaq futures closed down 0.8%.
With the weekend approaching, investors remain on edge over the Ukraine crisis. The soaring commodity prices have also weighed heavily upon market sentiment. Investors have been fleeing high risk assets such as stocks and moving to assets with less risk, such as gold and Treasury bonds.
Vasu Menon, executive director of investment strategy at OCBC Bank said:
“Markets are worried about nuclear fallout. The risk is that there is a miscalculation or overreaction and the war prolongs,”
“Markets don’t want a contagion effect and more European countries impacted by the crisis,”
“If investors are looking to buy, they need to have a strong and long-term risk appetite.”
