# Stocks slide, oil jumps as Russia orders troops to Ukraine regions
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-02-22
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: Global stocks tumble as Putin orders troop deployment in eastern Ukraine
Meta Description: Stocks tumble, safe-havens surge, oil spikes as Russia invades breakaway regions. Asia and US markets affected, with potential for major war and rising
URL: https://financedigest.com/stocks-slide-oil-jumps-as-russia-orders-troops-to-ukraine-regionshtml

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By Tom Westbrook and Xie Yu

SINGAPORE (Reuters) – Global stocks tumbled while safe-havens rallied and oil surged on Tuesday as Europe’s eastern flank stood on the brink of war after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine.

MSCI’s broadest index of Asia Pacific shares outside Japan skidded 1.44%, dragged down by markets in Hong Kong and mainland China. Japan’s Nikkei shed 2%.

S&P 500 futures fell 1.5%, Nasdaq futures lost 2.2%, and the [Russian rouble](https://www.financedigest.com/russian-rouble-nears-4-week-high-versus-dollar.html "Russian rouble nears 4-week high versus dollar") briefly touched an 18-month low in early Asia trade on Tuesday, after Russia’s MOEX equity index had fallen 10.5% the day before.

In contrast, Brent crude futures rose 2% to $97.21, touching a new seven-year high on worries Russia’s energy exports could get disrupted, and [spot gold hit a new six-month top](https://www.financedigest.com/algeria-regains-spot-as-spains-top-natural-gas-source-enagas.html "Algeria regains spot as Spain’s top natural gas source -Enagas") of $1,911.56. \[GOL/\]

Putin on Monday recognised two breakaway regions in eastern [Ukraine as independent and ordered the Russian army to launch](https://www.financedigest.com/u-s-ukraine-agree-to-launch-talks-to-upgrade-2008-trade-accord.html "U.S., Ukraine agree to launch talks to upgrade 2008 trade accord") what Moscow called a peacekeeping operation into the area, upping the ante in a crisis that could unleash a major war.

A Reuters witness saw columns of military vehicles including tanks early Tuesday on the outskirts of Donetsk, the capital of one of two breakaway regions, and Putin [signed treaties with leaders of the two breakaway regions giving](https://www.financedigest.com/germany-signs-deal-to-give-ownership-of-benin-bronzes-to-nigeria.html "Germany signs deal to give ownership of Benin Bronzes to Nigeria") Russia the right to build military bases.

Washington and [European capitals](https://www.financedigest.com/collegiate-ac-and-shuman-capital-launch-e300-million-european-student-living-fund.html "Collegiate AC and Shuman Capital launch €300 million European Student Living Fund") condemned the move, vowing new sanctions. Ukraine’s foreign minister said he had been assured of a “resolute and united” response from the [European Union](https://www.financedigest.com/explainer-why-malaysia-is-considering-a-ban-on-palm-oil-exports-to-the-european-union.html "Explainer-Why Malaysia is considering a ban on palm oil exports to the European Union").

However, a Biden administration official said [Russia’s move did not as yet constitute a “further invasion” that would trigger a broader sanctions](https://www.financedigest.com/russia-unleashes-rockets-after-mariupol-ceasefire-eu-eyes-oil-sanctions.html "Russia unleashes rockets after Mariupol ceasefire, EU eyes oil sanctions") package, as it was not a departure from what Russia had done already.

Following Russia’s latest move “we are much closer to military intervention, which of course is going to drive a lot of the [risk off sentiment](https://www.financedigest.com/dollar-stronger-as-inflation-worries-dampen-risk-sentiment.html "Dollar stronger as inflation worries dampen risk sentiment") in the markets,” said Carlos Casanova, senior Asia economist at UBP, adding the short term volatility in markets caused by both geopolitical factors and the U.S. Federal Reserve was ‘relentless’.

Casanova said the consequences would be higher [oil prices](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors"), an equity sell off, and people flocking to safe haven assets like the Japanese yen.

In [Hong Kong](https://www.financedigest.com/screening-of-winnie-the-pooh-horror-film-cancelled-in-hong-kong.html "Screening of ‘Winnie the Pooh’ horror film cancelled in Hong Kong"), shares of Russian aluminium producer OK Rusal plunged as much as 22.1% to HK$6.18, their biggest daily percentage decline since April 2018.

Away from Russia, and not helping the Hong Kong market, Hong Kong-listed Chinese tech stocks fell 2.25%, with heavyweights Tencent and Alibaba both [hit by speculation about a new wave](https://www.financedigest.com/cash-loving-germans-fret-over-exploding-atms-as-cross-border-crime-wave-hits.html "Cash-loving Germans fret over exploding ATMs as cross-border crime wave hits") of regulatory scrutiny.

In currency markets, the yen rose as much as 0.2% in [Asia to a nearly three-week high of 114.50 per dollar](https://www.financedigest.com/asia-shares-slip-dollar-strong-as-yuan-weakens.html "Asia shares slip, dollar strong as yuan weakens"), before paring its gains.

The euro fell 0.1% to a one-week low of $1.1296

In these circumstances, risk metrics are the driving force,” said NAB [head of foreign](https://www.financedigest.com/first-foreign-covid-vaccines-head-to-china-from-germany.html "First foreign COVID vaccines head to China from Germany") exchange strategy, Ray Attrill.

The nerves also drove U.S. [Treasury yields](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day") lower, with benchmark 10-year Treasury yields diving as much as 5.5 basis points to 1.8715%. Bets on Federal Reserve [rate hikes also eased](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise") and the chance of a 50-bp hike next month fell below 1-in-5.

U.S. policy makers have been sparring publicly about how [aggressively to begin tightening](https://www.financedigest.com/sterling-slides-as-bets-for-aggressive-u-s-tightening-boost-dollar.html "Sterling slides as bets for aggressive U.S. tightening boost dollar").

Federal Reserve Governor Michelle Bowman said on Monday that she will assess incoming economic data over the next three weeks in deciding whether a half percentage point interest rate [rise is needed at the central bank’s](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside") next meeting in March.

(Reporting by Tom Westbrook in Singapore and Xie Yu in [Hong Kong; additional reporting by Alun John in Hong Kong](https://www.financedigest.com/evergrande-winding-up-lawsuit-in-hong-kong-adjourned-to-nov-7.html "Evergrande winding-up lawsuit in Hong Kong adjourned to Nov 7") ; editing by Jane Wardell & Shri Navaratnam)


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