Hong Kong (CNN Business)Asian markets and US stock futures staged a modest rebound on Wednesday, hours after the United States announced its first set of sanctions against Russia for what US President Joe Biden termed “the beginning of a Russian invasion” on Ukraine.
Hong Kong’s Hang Seng Index (HSI) rose 0.6% in morning trading, after declining 2.8% on Tuesday -— its biggest daily loss in five months. China’s Shanghai Composite Index (SHCOMP) was up 0.4%, while South Korea’s Kospi (KOSPI) traded flat. Both indexes fell about 1% on Tuesday.
Japan’s stock market was closed Wednesday for a holiday.
The slight rebound in Asian markets came on the heels of modest gains in US stock futures. Dow (INDU) futures were up 77 points, or 0.2%. S&P 500 (INX) and Nasdaq (COMP) futures were up 0.3% and 0.4% respectively.
Oil prices were slightly higher. US crude futures edged 0.2% higher to $92.09 per barrel, while Brent crude was up 0.3% to $97.08 per barrel.
Biden on Tuesday laid out what he called a “first tranche” of US sanctions against Russia, including on two financial institutions, Russian sovereign debt, and Russian elites and their family members.
“This is the beginning of an invasion, and therefore this is the beginning of our response,” a senior US administration official said. “If Putin escalates further, we will escalate further using both financial sanctions and export controls, which we have yet to unveil.”
Other Western nations also announced retaliatory moves against Russia, with Germany on Tuesday halting certification of the controversial Nord Stream 2 pipeline which would transport natural gas from Russia to Germany.
“Punitive measures on Russia may be deemed as less aggressive than expected and some expectations are pointing to a standstill for now,” wrote Yeap Jun Rong, a Singapore-based market strategist for IG Group, in a research note on Wednesday.
He pointed out that the “harsher” impact from the penalties may come from the sovereign debt sanctions, which effectively cut Russia off from Western financing. But the other sanctions on state-owned banks and Russian elites seemed to be deemed as “relatively modest” by markets.
“That said, the situation remains highly volatile and uncertain, and any negative news flow may potentially throw markets into turmoil,” Yeap added.
Wednesday’s uptick was a sharp contrast to the previous trading day, when global stock markets tumbled and crude oil prices surged to $99 per barrel after Russia ordered troops into parts of eastern Ukraine. The Dow closed down nearly 483 points, or 1.4%. The S&P 500 finished the day 1% lower, entering a correction — defined by a 10% drop from its most recent peak. The Nasdaq shed 1.2%.
– CNN’s Kevin Liptak contributed to this report.
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