A currency trader holds his head at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 25, 2022. Asian shares rose Friday after U.S. stocks recovered toward the end of a wild trading day, as the world, including President Joe Biden, slapped sanctions against Russia for its invasion of Ukraine. (AP Photo/Ahn Young-joon)
NEW YORK (AP) — Wall Street pointed toward declines before Friday’s opening bell and world shares mostly advanced as Russian troops pressed toward the capital of Ukraine.
Future contracts for the benchmark S&P 500 and the Dow industrials were each 0.4% lower. Both had been down more than 1% earlier in off-hours trading.
Market benchmarks rose in London, Paris, Tokyo and Shanghai but fell in Hong Kong. Russian shares gained 14%, rebounding after a nosedive on Thursday as the invasion of Ukraine began.
The price of oil was back to its levels before the Russian invasion of Ukraine after hovering around $100 per barrel on Thursday. Most other commodities fell after surging the day before.
Despite uncertainty about the Ukraine and worries over inflation and the pandemic, an overnight turnaround on Wall Street seemed to buoy Asian and European shares.
Investors appeared relieved that sanctions against Russia were not as severe as they might have been, even as Ukraine’s president pleaded for international help to fend off an attack that could topple his democratically elected government, cause massive casualties and ripple out damage to the global economy.
Britain’s FTSE 100 gained 2.5% in early trading, while France’s CAC 40 rose 1.9% and Germany’s DAX rose 1.7%.
Russia was pressing its invasion of Ukraine to the outskirts of the capital Friday after unleashing airstrikes on cities and military bases and sending in troops and tanks from three sides in what amounts to the largest ground war in Europe since World War II.
Market players might be betting that the crisis could slow moves by central banks to cool inflation by raising interest rates and unwinding other support for pandemic-burdened economies, said Ipek Ozkardeskaya of Swissquote Bank SA.
“But in reality, it’s about volatility, high volatility that results from a high-voltage environment,” Ozkardeskaya wrote in a commentary. “This morning, the US equity futures are again in the red. It’s impossible to tell what direction the market will take in the next five minutes. The only certainty is uncertainty, and this is how it will be for the next couple of sessions unfortunately.”
The Russian invasion of Ukraine caused a barrage of new, targeted financial sanctions meant to isolate, punish and impoverish Russia in the long term.
But U.S. and European officials have held back on one key financial measure, choosing for now not to boot Russia off SWIFT, the dominant system for global financial transactions.
Japan on Friday announced new sanctions on Russia, including freezing the assets of Russian groups, banks and individuals and suspending exports of semiconductors and other sensitive goods to military-linked organizations in Russia.
Earlier in the week, Tokyo suspended new issuances and distribution of Russian government bonds in Japan, to reduce financing opportunities for Russia. It also banned trade with the two Ukrainian separatist regions.
But while most nations in Asia rallied to support Ukraine, China denounced sanctions against Russia, blaming the United States and its allies for provoking Moscow.
In Asian trading, Japan’s benchmark Nikkei 225 surged 2.0% to finish at 26,476.50. Australia’s S&P/ASX 200 lost some of its earlier gains to close 0.1% higher at 6,997.80. South Korea’s Kospi jumped 1.1% to 2,676.76. Hong Kong’s Hang Seng lost 0.6% to 22,767.18, while the Shanghai Composite rose 0.6% to 3,451.41.
Russia and Ukraine are major producers of both energy and grains and other commodities and the conflict pushed prices of many higher, adding to inflationary headaches for central banks.
Asian economies already reeling from the pandemic are particularly vulnerable to rising energy costs. Japan imports almost all its energy, although its purchases from Russia are limited.
On Friday, benchmark U.S. crude was up 74 cents at $93.55 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for international oil prices, added 33 cents to $95.75 a barrel.
Prices for energy have surged more in Europe than in the U.S. because its economy is more closely tied to Russia and Ukraine. The spot price in Europe for natural gas has jumped more than 50%.
Higher energy and food prices are amplifying worries about inflation, which in January was at its hottest level in the United States in a couple generations, and about what the Federal Reserve will do to rein it in.
The U.S. Fed looks certain to raise rates beginning next month for the first time since 2018. Although it sometimes has delayed big policy decisions in times of geopolitical uncertainty, such as the Kosovo war and the U.S. invasion of Iraq, economists say they still expect it to act to tamp down inflation. A major concern is whether it can do that without choking the economy into recession.
In currency trading, the U.S. dollar inched down to 115.45 Japanese yen from 115.48 yen. The euro cost $1.1211, up from $1.1204.
The Russian ruble was up more than 2% at 82.72 to the dollar.
Shares in the online craft marketplace Etsy continued their climb, rising nearly 17% in premarket trading following Thursday’s 10% gain. The company beat sales and profit expectations for the fourth quarter and said it was raising its seller fee to 6.5% from 5%.
Copyright 2021 Associated Press. All rights reserved.
