Asian Stocks Tumbles As Ukraine War Boosting Inflation Concerns

Asian stocks fell on Thursday as traders considered the emerging trends in the Ukraine conflict and more hawkish remarks from US Federal Reserve officials, while US bond trading was paused and oil prices rose.

Outside Japan, MSCI’s broadest index of Asia-Pacific stocks (.MIAPJ0000PUS) fell 0.6 percent. After hitting a two-month high the previous session, Japan’s Nikkei (.N225) tumbled more than 1% on Thursday morning.

The Hang Seng Index (.HSI) in Hong Kong was down 0.9 percent, while the mainland’s bluechip index (.CSI300) was down 0.7 percent.

Tencent (0700.HK), the Chinese social networking and gaming behemoth saw revenue grow at its weakest rate since going public in 2004, indicating regulatory scrutiny that has harmed both its gaming and advertising businesses.

Since August of last year, China has halted game approvals and limited gaming time for minors under the age of 18, as part of Beijing’s effort to regain control over its society and industry, including technology, following years of unfettered expansion.

President Joe Biden of the United States landed in Brussels on Thursday for a series of conference discussions on the Ukraine War, with Biden expected to release a package of Russia-related sanctions on political officials and billionaires.

Russia President wants ‘unfriendly’ nations to pay in roubles for gas

Russia’s President Vladimir Putin said on Wednesday that if gas is supplied to “unfriendly” nations, Russia will require rouble payment.

Since Moscow pushed soldiers into Ukraine on February 24, European countries and the United States have placed harsh sanctions on Russia. However, Europe relies significantly on Russian gas for heating and power production, and the European Union is divided on whether Russia’s energy industry should be sanctioned.

Russian gas contributes to over 40 percent of overall European gas consumption. This year, European gas imports from Russia have ranged from 200 million to 800 million euros ($880 million) each day.

Brent crude prices were up 45 cents, or 0.4 percent, at $122.05 a barrel, while U.S. crude futures were down 45 cents, or 0.4 percent. At $115.05 a barrel, West Texas Intermediate futures rose roughly 15 cents or 0.2 percent.

Meanwhile, the bond market took a breather, with the yield on 10-year Treasury notes ending at 2.3098 percent in Tokyo trade, down from an almost three-year high of 2.4170 percent overnight.

The two-year yield, which is more vulnerable to traders’ forecasts for the fed funds rate, was 2.1233 percent on Wednesday, down from a nearly three-year peak of 2.2020 percent on Tuesday.

Regulators at the Federal Reserve said on Wednesday that they are prepared to take more aggressive measures to reduce unreasonably high inflation, including a possible half-point interest rate rise at the next policy meeting in May.

On Wednesday, major U.S. equity indices fell by more than 1%. The Dow Jones Industrial Average was down 448.96 points, or 1.3 percent, to 34,358.5; the Nasdaq Composite fell 186.21 points, or 1.3 percent, to 13,922.60, and the S&P 500 was down 55.41 points, or 1.2 percent, to 4,456.2.

On Thursday, currency markets remained stable, with the Japanese yen continuing to lose ground. Rising US rates and a growing trade gap drove investment out of Japan, sending it to a six-year lowest of 121.41 on Wednesday.

After many days of significant increases, the euro held around $1.0988, while the Australian dollar took a vacation. The Australian dollar remained unchanged at $0.74955, close to a nearly five-month high of $0.75070 set on Wednesday.

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