Stocks fell Friday in Asia after a retreat on Wall Street as escalating worries over the possibility Russia may invade Ukraine rattled global financial markets.
Benchmarks were moderately lower in Tokyo, Sydney and Hong Kong, but rose in Shanghai.
On Thursday, the S&P 500 fell 2.1%, its biggest drop in two weeks, the Dow Jones Industrial Average declined 1.8% and the Nasdaq composite slid 2.9%. The losses wiped out the major indexes’ weekly gains.
The wave of selling came as President Joe Biden warned that Russia, which is believed to have built up some 150,000 military forces near Ukraine’s borders, could invade within days. Dignitaries raced for solutions but suspicions between East and West only seemed to grow, as NATO allies rejected Russian assertions it was pulling back troops from exercises that had fueled fears of an attack.
The Ukraine crisis has hung over markets for weeks, adding to volatility in markets. Russia is a major energy producer and if it invades Ukraine and other governments respond with economic sanctions, that could impede access to about 7% of the global energy market, said Tom Martin, a senior portfolio manager with Globalt Investments.
“Without any clear resolution in the near term, the uncertainty for a potential invasion is sufficient to keep market participants shunning from risk assets, while flocking to safe-havens," Yeap Jun Rong of IG said in a commentary.
Japan reported Friday that its core inflation rate, excluding volatile energy and food costs, rose 0.2% in January, way below the decades-high figures seen in most major economies and far short of the Bank of Japan's 2% target.
Tokyo's Nikkei 225 index lost 0.3% to 27,154.99, while the Hang Seng in Hong Kong gave up 0.4% to 24,685.44. The Kospi in Seoul lost 0.1% to 2,742.41. Australia's S&P/ASX 200 declined 0.7% to 7,242.30.
The Shanghai Composite index rose 0.3% to 3,478.46.
About 85% of the stocks in the benchmark S&P 500 closed lower on Thursday. It fell 94.75 points to 4,380.26 and is now 8.7% below the all-time high it set on Jan. 3.
The Dow slid 622.24 points to 34,312.03, while the tech-heavy Nasdaq lost 407.38 points to 13,716.72.
Small company stocks also fell broadly. The Russell 2000 index gave up 2.5% to 2,028.09.
The technology sector was the biggest drag on the index, along with communication stocks and companies that rely on consumer spending. Microsoft fell 2.9%, Facebook parent Meta slid 4.1% and Nike fell 2.5%.
But some companies fared well thanks to strong earnings. Walmart, the world’s largest retailer, rose 4% after reporting strong fourth-quarter financial results. Cisco Systems, which makes routers, gained 2.8% after raising its profit forecast for the year.
Bond yields fell and dragged banks lower. The yield on the 10-year Treasury fell to 1.97% from 2.04% late Wednesday. Bank of America slid 3.4%.
The price of gold, traditionally a safe haven during geopolitical uncertainty, rose 1.6%.
The tensions over Ukraine add to investors are facing as the Federal Reserve prepares to raise interest rates to fight persistently rising inflation, which has spiked to a 40-year high.
Companies have been dealing with supply chain problems and higher costs by raising prices on finished goods for consumers. Many have also warned investors that inflation will sap their profits, sales and overall operations.
So far, consumers appear not to have pulled back on spending due to higher prices. The Commerce Department reported that retail sales surged 3.8% in January as the threat of the omicron variant of COVID-19 faded.
In other trading Friday, U.S. benchmark crude lost 70 cents to $91.06 per barrel in electronic trading on the New York Mercantile Exchange. It fell 2% on Thursday, while the price of natural gas fell 4.9%.
Brent crude, the international pricing standard, lost 56 cents to $92.41 per barrel.
The U.S. dollar rose to 115.17 Japanese yen from 114.93 yen. The euro fell to $1.1362 from $1.1365.
