U.S. equity futures retreated and global stock indexes fell sharply as investor concerns mounted about Russia’s intensifying military campaign in Ukraine.
News of damage to a major Ukrainian nuclear-power plant rattled already fragile sentiment. Market participants are trying to assess how much the conflict, and tough Western sanctions on Russia, will damage global economic growth and further stoke inflation by disrupting commodity supplies.
By early afternoon on Friday in Hong Kong, futures tied to the Dow Jones Industrial Average, S&P 500 and Nasdaq-100 had declined between 0.8% and 1%, pointing to potential declines for American markets in their Friday session.
Ukrainian officials said Russian shelling caused a fire at a nuclear power plant, prompting international concern about a nuclear disaster and renewing fears about Moscow’s tactics. However, officials told the International Atomic Energy Agency the fire didn’t affect essential equipment, lessening concerns about reactor damage.
The highly uncertain and worsening situation in Ukraine was driving investors to trim risk exposure ahead of the weekend, said Kenny Wen, wealth management strategist at Everbright Securities International in Hong Kong.
Mr. Wen said investors were “worried about inflation and worried about the global economy.” He added: “If oil prices go up significantly, just like the 1970s, the global economy could go into recession, which will hurt corporate profits. Then the impact will be long-lasting.”
Front-month futures prices for Brent crude oil, the global benchmark, rose 1.6% to $112.17 a barrel. The U.S. equivalent, West Texas Intermediate crude, added 1.8% to $109.62 a barrel. In the previous session, WTI briefly topped $116 for the first time since 2008.
Asian stocks dropped, in part reflecting Thursday’s action on Wall Street, where technology stocks sold off more than the broader market and U.S.-listed Chinese companies stumbled.
Japan’s Nikkei 225 traded down about 2.3%. Hong Kong’s benchmark Hang Seng Index fell 2.7%, putting it on course for its lowest close since March 2020.
Tech-related stocks were among the heaviest hit, with Japan’s
falling 4.5% and Chinese food-delivery giant
retreating more than 7% in Hong Kong, on pace for its lowest close since June 2020.
In mainland China, the CSI 300 index that tracks large shares listed in either Shenzhen or Shanghai fell 0.9%.
In bond markets, the yield on the benchmark 10-year U.S. Treasury note declined to 1.803%, according to Tradeweb, down 0.04 percentage point from Thursday. Bond yields decline as prices rise.
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