By our staff Reporter/Agencies
Tokyo: Putin sent shocking waves across the world on Wednesday by accusing the West of ‘ Nuclear Blackmail’ and ordering a partial mobilization.
His remarks proved lethal for the market in Asia pacific with the major Asia-Pacific stock indexes finishing lower on Wednesday. Japan’s Nikkei 225 touched a two-month low ahead of today’s U.S. Federal Reserve policy decisions at 18:00 GMT.
Putin’s remarks also jolted investors who flocked to the safe-havens such as government bonds, the U.S. Dollar and the Japanese Yen by ordered a partial mobilization and accused the West of “nuclear blackmail”.
According to verified reports Japan’s Nikkei 225 Index settled at 27313.13, down 375.29 or 1.36%on Wednesday. Hong Kong’s Hang Seng Index finished at 18444.62, down 336.80 or -1.79% and South Korea’s KOSPI Index closed at 2347.21, down 20.64 or -0.87%, according FXEMPIRE.
In China, the benchmark Shanghai Index settled at 3117.18, down 5.23 or -0.17% and in Australia, the S&P/ASX 200 Index finished at 6700.20, down 106.20 or -1.56%.
Russian President Vladimir Putin rattled the Asia-Pacific markets on Wednesday after he called up 300,000 reservists to fight in Ukraine and said Moscow would respond with the might of all its vast arsenal if the West pursued what he called its “nuclear blackmail” over the conflict there.
It was Russia’s first such mobilization since World War Two and signified a major escalation of the war, now in its seventh month.
In a televised address to the Russian nation, Putin said: “If territorial integrity of our country is threatened, we will use all available means to protect our people – this is not a bluff”.
Russia had “lots of weapons to reply,” he said.
Sellers hit stock markets in the Asia-Pacific region. The Euro also tumbled, but gold and crude oil rose with the latter jumping 3%.
Clearly, Putin upped the ante in the region by bringing up the ‘Nuclear Card’ and investors will be watching for how the West responds. More sanctions on the way? Oil and commodity shortages? Faster route to a massive global recession? These are factors that investors have to consider as the major central bankers push for more rate hikes.
The Asian Development Bank now sees growth of 4.3% in 2022 and 4.9% in 2023 for emerging Asian economies, according to the latest updates in its report.
The Manila-based lender slashed its forecasts for China to 3.3% in 2022 from its previous prediction of 4% revised in July, dragging down the wider region’s growth prospects.
Taiwan and South Korea, in particular, are likely to see a decline in export demand, Asian Development Bank Chief Albert Park told CNBC’s “Squawk Box Asia.”
