Asian markets down as Ukraine conflict fears escalate

  • Business
  • Wednesday, 06 Aug 2014

HONG KONG: Asian stocks dropped Wednesday, following a sharp fall on Wall Street over fears of a market correction and concerns the conflict in Ukraine could escalate.

Analysts cited comments by Polish Foreign Minister Radoslaw Sikorski, who said Russia had increased its military presence on the Ukraine border, suggesting the situation could deteriorate.

Hong Kong slipped 0.36%, and Shanghai was 0.64% lower, while Seoul dipped 0.1%. Tokyo fell 1% by the break.

"If Poland is indeed right that Russia is about to increase its presence in the east of Ukraine, buyers of all things risk will disappear fast as this is an indefinable outcome for markets," IG strategist Evan Lucas told Dow Jones Newswires.

In the US, the Dow Jones Industrial Average dropped 139.81 points (0.84%) to 16,429.47.

The broad-based S&P 500 fell 18.78 (0.97%) to 1,920.21, while the Nasdaq Composite Index sank 31.05 (0.71%) to 4,352.84.

The drop follows heavy losses at the end of July, which saw the Dow shed its gains for the year in its worst week since January, and the S&P 500 record its biggest weekly decline since mid-2012.

Mace Blicksilver, director at Marblehead Asset Management, said of Tuesday's fall: "It's continuing the trend from last week."

He added that some pundits have predicted a possible drop of 10% or more in stocks. US stocks have avoided a correction on this scale for more than two years.

In Tokyo, the Nikkei was also affected by a slump in shares in SoftBank – one of the biggest constituents – which fell 3.11% to 7,000 yen.

The drop followed reports the Japanese carrier's US unit Sprint is ending its pursuit of rival T-Mobile due to concerns about regulatory approval.

On foreign exchange markets, the dollar was at 102.57 yen in early Tokyo trade Wednesday, compared with 102.62 yen in New York late Tuesday.

The euro bought US$1.3371 and 137.14 yen against US$1.3369 and 137.20 yen.

In oil trade, prices moved higher. The US benchmark West Texas Intermediate for September delivery rose 29 cents to US$97.67 while Brent crude gained 27 cents to US$104.88

Gold fetched US$1,289.56 an ounce by 0230 GMT compared with US$1,292.10 late Tuesday. – AFP

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