Hong Kong, China | Equity markets plunged Monday, while oil prices soared to a near 14-year high and safe-haven gold broke $2,000 as investors grew increasingly fearful about the impact of the Ukraine war on the global economy.
Trading floors were a sea of red in early exchanges with experts warning of a period of stagflation with the spike in crude likely to light a fire under already high inflation.
The commodity at one point rocketed almost 18 percent to $139.13 — a level not seen since mid-2008 — after US Secretary of State Antony Blinken said the White House and allies were in talks about banning imports from Russia.
And Mike Muller of Vitol warned of further pain.
“We have plenty of twists and turns to come,” he told a podcast produced by Dubai-based consultant and publisher Gulf Intelligence.
National Australia Bank’s Tapas Strickland said: “Global growth fears abound given the surge in commodity prices, with ‘stagflation’ again rearing its head in what must be akin to a horror movie for a central bank.
“A key question for markets is how do central banks respond to higher inflation and the possibility of slower growth ahead.”
The euro remained wedged below $1.10 for the first time since mid-2020.
On Monday, Asian bourses were deep in the red, with Hong Kong at one point losing more than four percent, while Tokyo and Taipei were off more than three percent.
The panic on trading floors sent safe havens sharply higher, with gold — a key go-to in times of crisis and turmoil — hitting as much as $2,000.86, its highest since mid-2020.
The dollar was also well up against most other currencies, while Treasuries continued to rally.
Key figures around 0230 GMT
Brent North Sea crude: UP 8.4 percent at $128.02 per barrel
West Texas Intermediate: UP 7.4 percent at $124.24 per barrel
Tokyo – Nikkei 225: DOWN 3.2 percent at 25,166.23 (break)
Hong Kong – Hang Seng Index: DOWN 3.5 percent at 21,137.01
Shanghai – Composite: DOWN 1.1 percent at 3,409.48
Dollar/yen: UP at 114.90 yen from 114.78 yen late Friday
Euro/dollar: DOWN at $1.0850 from $1.0916
Pound/dollar: DOWN at $1.3200 from $1.3248
Euro/pound: DOWN 82.18 pence from 82.60 pence
New York – Dow: DOWN 0.5 percent at 33,614.80 (close)
London – FTSE 100: DOWN 3.5 percent at 6,987.14 (close)
© Agence France-Presse
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