Oil prices jumped and stocks fell after Russian President Vladimir Putin ordered the dispatch of troops to two Moscow-backed breakaway regions in eastern Ukraine, putting his country on its feet. war and preventing attempts at a diplomatic solution to the crisis.
Brent crude, the international oil benchmark, jumped 2.3% to $97.59 a barrel, a new seven-year high, while West Texas Intermediate, the US marker, rose 3.6% at $94.32.
In equities, Hong Kong’s benchmark Hang Seng lost 2.1%, while Japan’s Topix index fell 1.2% and South Korea’s Kospi lost 1%. Australia’s S&P/ASX 200 lost 0.9%.
“Markets will be dominated today by the decree from Russia,” said Robert Carnell, strategist at ING, adding that “futures suggest a sharp drop in risk assets.”
Futures contracts tumbled Wall Street as U.S. markets returned from a holiday, with the S&P 500 expected to fall 1.7% and the tech-focused Nasdaq expected to fall 2.3%.
In sovereign debt markets, bond yields fell as investors sought protection from falling equity prices, with the yield on the 10-year US Treasury falling 0.06 percentage points to 1.867 %.
The moves in global markets also came after Moscow claimed it destroyed Ukrainian military vehicles that entered Russian territory and Putin agreed to recognize two Moscow-backed breakaway regions in eastern Ukraine.