Markets slip on Ukraine risk

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SYDNEY- Asian share markets dropped and safe haven assets such as gold rose on Tuesday, as investors contemplated the implications of a potential imminent Russian invasion of Ukraine.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 percent after stock markets in the United States and Europe lost ground on Monday.

Japan’s Nikkei fell 0.91 percent while in Australia, the S&P/ASX200 closed down 0.51 percent.

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Hong Kong’s Hang Seng Index slid 1.1 percent although China’s CSI300 Index bucked the sell-off across the region and was up 0.7 percent.

“Geopolitical risk will be the clear driver of sentiment for markets this week,” said Marcella Chow, global markets strategist at JPMorgan Asset Management.

“The broader risk appetite among investors is going to be under pressure and as a result we expect to see a flight to safety in gold, US dollars and longer-term Treasuries.”

The negative tone in Asia was set to be replicated in equities markets across the world on Tuesday.

In early European trades, pan-region Euro Stoxx 50 futures were off 0.32 percent at 4,039, German DAX futures eased 0.31 percent to 15,033 and FTSE futures down 0.31 percent at 7,448.5.

US stock futures, the S&P 500 e-minis, were down 0.07 percent at 4,391

The share market sell-off driven by risk aversion helped push gold to an eight-month high as investors sought shelter in the traditional safe haven asset.

Spot gold was up 0.4 percent at $1,877.72 per ounce.

“In the near term there will be support for gold because of the uncertainty of a potential military conflict,” Jack Siu, Credit Suisse’s chief investment officer for Greater China, told Reuters.

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