AP, Bangkok :
Shares fell sharply in Asia on Tuesday after Russian President Vladimir Putin ordered troops into separatist regions of eastern Ukraine, suggesting a long-feared invasion was possibly underway. Tokyo’s Nikkei 225 index dropped 2.2 per cent and the Hang Seng in Hong Kong fell 3.2 per cent in early trading Tuesday. Oil prices jumped, with U.S. crude up 2.8 per cent. The future for the S&P 500 dropped 1.7 per cent while the contract for the Dow industrials lost 1.5 per cent. US markets were closed on Monday for Presidents Day.
In Europe, shares slipped Monday as investors awaited developments in the Ukraine crisis. Germany’s DAX gave up 2.1 per cent. In Paris, the CAC 40 in Paris declined 2 per cent. Britain’s FTSE 100 fell 0.3 per cent. Russia’s MOEX index dropped nearly 11 per cent. The ruble was down 3.2 per cent against the US dollar. Western powers fear Russia might use skirmishes in Ukraine’s eastern regions as a pretext for an attack on the democracy, which has defied Moscow’s attempts to pull it back into its orbit.
A vaguely worded decree signed by Putin cast the order for troops to move into eastern Ukraine as an effort to ‘maintain peace.’ He also recognized the independence of the separatist regions, apparently dashing slim remaining hopes of averting a conflict that could cause massive casualties, energy shortages on the continent and economic chaos around the globe.
The White House issued an executive order to prohibit U.S. investment and trade in the separatist regions, and additional measures – likely sanctions – were to be announced Tuesday. In Asian trading, the Nikkei 225 in Tokyo was down 582.97 points at 26,327.90 while Hong Kong’s Hang Seng gave up nearly 800 points to 23,390.29. South Korea’s Kospi lost 1.8 per cent to 2,693.38 and the Shanghai Composite index fell 1.2 per cent to 3,448.49. Australia’s S&P/ASX 200 lost 1.4 per cent to 7,134.50. Russia is a major energy producer and the tensions have led to extremely volatile energy prices. US benchmark crude oil advanced $2.42 to $92.63 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing basis, added $1.38 to $96.77 per barrel. The tensions in Eastern Europe have added to worries over how the world’s central banks, especially the US Federal Reserve, will act to counter surging inflation.
In currency trading, the US dollar slipped to 114.62 Japanese yen from 114.74 yen late Monday. The euro fell to $1.1300 from $1.1312.
