SINGAPORE, March 4 – Asian stocks and the euro weakened on Friday as oil prices soared as investors feared reports of a fire at a nuclear power plant amid fierce fighting between Ukraine and Russian troops.
The risk-reducing appetite has shattered markets across the region, sending Wall Street futures lower as well, suggesting more pain for European and US markets when they open later in the day.
RIA quoted the Ukrainian Ministry of Atomic Energy as saying that a generator at the Zaporozhye nuclear power plant, the largest of its kind in Europe, had been hit during an attack by Russian troops.
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While prices have since reduced losses from morning lows, there are no immediate changes in radiation levels in the area, investors remain extremely worried.
“Markets are worried about the nuclear consequences. “The risk is that there are miscalculations or overreactions, and the war is dragging on,” said Vasu Menon, executive director of investment strategy at OCBC Bank.
MSCI’s broadest Asia-Pacific stock index from the former Japan (.MIAPJ0000PUS) fell 1.6 percent to 585.5, the lowest level since November 2020, with losses of the year reaching 7%. He regained some losses, but is still down 1.4%.
“Markets do not want a contagious effect and more European countries are affected by the crisis,” Menon said. “If investors want to buy, they need to have a strong and long-term risk appetite.”
Stock markets across Asia were in a sea of red, with Japan (.N225) losing 2.6%, South Korea 1.3%, China (.SSEC) 0.7% and Hong Kong 2.7%, while commodity Australia .AXJO) decreased by 0.7%.
S&P 500 futures fell 0.9 percent and Nasdaq futures fell 1 percent. Overnight, Wall Street ended lower as investors remained on the brink of the crisis in Ukraine, while rising commodity prices also weighed on market sentiment.
A man wearing a protective face mask after an outbreak of coronavirus disease (COVID-19) walks in front of a stock exchange quote in front of a brokerage house in Tokyo, Japan, March 10, 2020. REUTERS / Stoyan Nenov / Files
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Investors sought asylum in US asylum bonds, sending yields at the 10-year reference yield as much as 14 basis points lower to 1.7%. Later, they rose to 1.78%.
Oil prices jumped on Friday after closing steadily a day earlier, with the market also focusing on whether OPEC + producers, including Saudi Arabia and Russia, will increase production from January.
Brent crude futures for May rose to $ 114.23 a barrel and were up 1.5 percent to $ 112.2 last. The contract fell 2.2% on Thursday.
There was no decline in other commodities as well, with Chicago wheat futures jumping nearly 7%, with weekly profits reaching more than 40% due to supply concerns.
In terms of economic data, the US employment report on Friday is expected to show another month of strong job growth, with the wave of Omicron COVID-19 infections significantly reduced.
“We are still talking about very strong global growth, we are still recovering, we are reopening from the pandemic, we still have confidence in consumer prospects,” said David Goodman, lead economist at Aware Super, one of Australia’s largest pension funds. which manages more than $ 150 billion.
Goodman said market instability underscores the need for a diversified portfolio with exposure to different markets, adding that the fund’s portfolio includes companies in the renewable energy, digital infrastructure, housing and logistics sectors.
Gold prices also rose on Friday, expecting their best weekly profit since May 2021. Spot gold rose 0.2% to $ 1,939.5.
In the foreign exchange markets, the euro lost even more positions and was determined to be its worst week against the dollar in nine months. It fell 0.3% to $ 1.10320 and traded above the bottom for the day. It lost about 1.8% this week, which would be the worst week for the euro since June 2021.
Federal Reserve Chairman Jerome Powell reiterated his comments on Wednesday that he would support an initial quarter-percentage point increase in the bank’s base interest rate.
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Report by Anshuman Daga; Edited by Edwina Gibbs and Sam Holmes
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