Global stocks sink as oil price rises, Ukraine conflict deepens

Monday Mourning

- War continues to dampen mkt sentiment

- No sign of conflict resolution

- Western sanctions failed to deter any aggression

- High oil price a threat to corporate margins.

Tokyo: In early European trading, France's CAC 40 dipped 3 per cent to 5,879.70, while Germany's DAX lost 3.2 per cent to 12,675.43. Britain's FTSE 100 dropped 1.4 per cent to 6,890.71. U.S. shares were set to start the week lower, with the futures for both the Dow Jones Industrial Average and the S&P 500 down 1.8 per cent. Higher fuel costs are devastating for Japan, which imports almost all its energy. Japan's benchmark Nikkei 225 lost 2.9 per cent to 25,221.41. Hong Kong's Hang Seng dropped 3.9 per cent to 21,057.63, while South Korea's Kospi slipped 2.3 per cent to 2,651.31. Australia's S&P/ASX 200 shed 1.0 per cent to 7,038.60. while the Shanghai Composite lost 2.2 per cent to 3,372.86.

"The Ukraine-Russia conflict will continue to dominate market sentiments and no signs of conflict resolution thus far may likely put a cap on risk sentiments into the new week," said Yeap Jun Rong, market strategist at IG in Singapore. "It should be clear by now that economic sanctions will not deter any aggression from the Russians, but will serve more as a punitive measure at the expense of implication on global economic growth. Elevated oil prices may pose a threat to firms' margins and consumer spending outlook," Yeap said.

China reported Monday that its exports rose by double digits in January and February before Russia's attack on Ukraine roiled the global economy. Customs data show exports grew by 16.3 per cent over a year earlier in a sign global demand was recovering before President Vladimir Putin's Feb. 24 invasion. Imports advanced 15.5 per cent despite a Chinese economic slowdown that the war threatens to worsen. China's No. 2 leader, Premier Li Keqiang, warned Saturday global conditions are "volatile, grave and uncertain" and achieving Beijing's economic goals will require "arduous efforts."

Markets worldwide have swung wildly recently on worries about how high prices for oil, wheat and other commodities produced in the region will go because of Russia's invasion, inflaming the world's already high inflation. The list of companies exiting Russia has grown to include Mastercard, Visa and American Express, as well as Netflix. The conflict in Ukraine also threatens the food supply in some regions, including Europe, Africa and Asia, which rely on the vast, fertile farmlands of the Black Sea region, known as the "breadbasket of the world."

Wall Street finished last week with shares falling despite a much stronger report on US jobs than economists expected. The S&P 500 fell 0.8 per cent to 4,328.87, posting its third weekly loss in the last four. It is now down just under 10 per cent from its record set early this year. In currency trading, the U.S. dollar edged up to 115.08 Japanese yen from 114.86 yen. The euro cost $1.0830, down from $1.0926.

Oil prices jumped and shares were sharply lower Monday as the conflict in Ukraine deepened amid mounting calls for harsher sanctions against Russia.

Brent crude oil briefly surged above $130 a barrel but was trading around $125 a barrel later Monday. Benchmark US crude also bounced, gaining $10 and then giving up some of that advance. European markets opened lower and US futures were down 1.7 per cent. The price of gold surged above $2,000 an ounce as investors bought the precious metal viewed as a safe haven in times of crisis. Russian forces were pummelling some Ukrainian cities with rockets even after Moscow announced another cease-fire and proposed a handful of humanitarian corridors to allow civilians to flee Ukraine starting Monday.

A similar temporary cease-fire in two Ukrainian cities failed over the weekend — and both sides blamed each other. US House of Representatives Speaker Nancy Pelosi said the House was exploring legislation to further isolate Russia from the global economy, including banning the import of its oil and energy products into the US Oil prices came under additional pressure after Libya's national oil company said an armed group had shut down two crucial oil fields.