Asian stocks steady, investors hold their breath as Ukraine resists Russian invaders

A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic chart displaying the Russian Trading System (RTS) Index, Japan’s Nikkei Index and the Dow Jones Industrial Average outside a brokerage in Tokyo, Japan, February 25, 2022. REUTERS/Kim Kyung-Hoon

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HONG KONG, March 1 (Reuters) – Markets paused on Tuesday after days of volatility with Asian stocks up slightly and gold down slightly as investors watched the conflict in Ukraine unfold and weighed in its economic implications, particularly with regard to energy prices.

Global stock markets have fallen in recent days following Russia’s invasion of Ukraine and mounting sanctions from Western allies, including cutting off some Russian banks from the SWIFT financial network and limiting capacity of Moscow to deploy its $630 billion in foreign exchange reserves.

High-level talks between Kyiv and Moscow last night ended with no agreement except to keep talking, but Asian markets stabilized on signs of no immediate escalation in sanctions.

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MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) gained 0.5%, while Japan’s Nikkei (.N225) jumped 1.5% in early trading.

Australia’s S&P/ASX 200 index (.AXJO) rose 1.38%, boosted by financial and technology stocks ahead of a central bank policy meeting, and China’s blue chips (.CSI300) rose 0, 5%.

“Much of what is happening in the markets is obviously overshadowed by the news around Ukraine and Russia in terms of negotiations, but the main drivers are going to be the response of governments and central banks in terms of parameters policies,” said Kerry Craig. , Sydney-based global market strategist at JPMorgan Asset Management.

“Markets are going to focus on the broader implications of what’s going to happen around energy prices, what that means for inflation in some parts of the world,” he said.

Brent crude futures rose 0.63% to $98.59 a barrel on Tuesday. The benchmark hit a seven-year high of $105.79 after the start of Russia’s invasion of Ukraine last week, although markets have calmed down as the United States and its allies discuss of a coordinated release of crude stocks in an attempt to mitigate any disruption in oil and gas supplies from Russia.

Currency markets were also fairly quiet on Tuesday, with the euro back to around $1.12 after falling to $1.11210 at one point on Monday.

The Russian ruble stabilized after plunging as much as 30% to a record 120 to the dollar after Western countries and their allies imposed new sanctions on Russia, but following the bank’s action Russian powerhouse, it last traded at 102 to the dollar.

Benchmark 10-year U.S. Treasury yields were at 1.8629%, gradually retreating a bit of ground from Monday’s drop.

Spot gold was down 0.3% at $1,902 an ounce, after hitting 1,973.96 last week.

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Reporting by Selena Li; Editing by Simon Cameron-Moore

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Robert D. Coleman