SINGAPORE/HONG KONG – Global stocks tumbled while safe-havens rallied and oil surged on Tuesday as Europe’s eastern flank stood on the brink of war after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine.
MSCI’s broadest index of Asia Pacific shares outside Japan was on course for its worst day for this month, off 2.1 percent, weighed by markets in Hong Kong and mainland China.
Japan’s Nikkei shed 2.5 percent.
US and European markets were also braced for sharp losses at the opening bell, with S&P 500 futures down 1.8 percent, Nasdaq futures off 2.5 percent, the pan-region Euro Stoxx 50 futures 1.53 percent lower, and FTSE futures down 0.89 percent.
In contrast, Brent crude futures rose 1.5 percent to $96.85, after touching a new seven-year high at $97.21 early in the session on worries Russia’s energy exports could be disrupted. Spot gold added 0.2 percent to $1,909.10, having earlier hit a new six-month top of $1,911.56.
Putin on Monday recognized two breakaway regions in eastern Ukraine as independent and ordered the Russian army to launch what Moscow called a peacekeeping operation into the area, upping the ante in a crisis that could unleash a major war.
A Reuters witness saw columns of military vehicles including tanks early Tuesday on the outskirts of Donetsk, the capital of one of two breakaway regions, and Putin signed treaties with leaders of the two breakaway regions giving Russia the right to build military bases.
Washington and European capitals condemned the move, vowing new sanctions. Ukraine’s foreign minister said he had been assured of a “resolute and united” response from the European Union. – Reuters
