Shares fell, commodity prices soared and the euro sank after the US said it was discussing a ban on oil imports from Russia and investors digested the threat of a prolonged escalation in energy prices.
Asian stock markets opened the week with sharp declines. Hong Kong’s Hang Seng led with a 3.3 percent drop, heading for the lowest closing since the onset of the plague. China’s CSI 300 was down 2.4% and the Japanese Topix index was down 3.2%.
Futures also pointed to sharp declines in European equities, with the Euro Stoxx 50 tending to fall by about 3% and the FTSE 100 expected to fall by 2.7%. The S&P 500 was expected to fall 1.4% when trading began on Wall Street later in the day.
The fall in global equities occurred when Brent Brent rose nearly 18% to $ 139.13 a barrel in early trading on Monday. The highest level since 2008, Before cutting profits to rise more than 8 percent at $ 128.12. The US marker West Texas Intermediate rose 7.4% to $ 124.25.
The rise in oil prices came after US Secretary of State Anthony Blinken said Washington was in “very active discussions” with European allies. Nancy Pelosi, chairwoman of the U.S. House of Representatives, said Congress was “reviewing” legislation to ban Russian oil imports.
“The world is very unprepared for this shock,” said Robert Rani, head of global market strategy at Westpack. He said it was unclear whether a US ban would cover only oil or all Russian energy imports, but said the latter would have a “catastrophic effect” on energy prices.
The prospect of expanded sanctions to hurt Russian oil shipments has shocked global commodity markets. Contracts for natural gas in Europe closed Friday’s session up more than 170 percent year-over-year.
Along with crude oil, many commodities including natural gas, palm oil and nickel have reached a peak many years since the outbreak of the war. Palladium, a major component in automotive catalytic converters, jumped 5.3 percent to a record $ 3,169.46 an ounce.
In Chinese markets, futures on iron ore rose 7.6% to Rmb874.50 ($ 138.53) per tonne while nickel rose almost 8% to a high of Rmb203,140 per tonne.
Traders threw in riskier assets in favor of sovereign debt, which pushed yields down. The yield on the U.S. Treasury Department for 10 years fell by 0.04 percentage points to about 1.69 percent.
Investors were also looking for security in the dollar, which caused declines for a string of currencies. The euro was down 0.5% to $ 1.09 while the Australian dollar was down 0.6% to $ 0.74.
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Commodity prices surge and shares sink as US discusses Russia oil ban Source link Commodity prices surge and shares sink as US discusses Russia oil ban