Stocks plunge, oil soars after Russian action in Ukraine

BEIJING — Stocks plunged and oil prices jumped more than $8 a barrel on Thursday after Russian President Vladimir Putin launched military action in Ukraine, prompting Washington and Europe to promise Moscow sanctions that could disrupt the global economy.

Market benchmarks in Europe and Asia fell more than 4% as traders tried to determine the extent of Putin’s incursion and the extent of Western retaliation. Wall Street futures fell, indicating that US stocks were likely to fall after markets opened.

Energy prices surged, fueling inflation fears. Europe’s spot price for natural gas, for which the continent depends on Russia for supply, jumped 31%.

Brent crude jumped above $100 a barrel in London for the first time since 2014 on concerns over a possible disruption of supplies from Russia, the third-largest producer. Benchmark US crude briefly rose above $98 a barrel. Wheat and maize prices also jumped.

The ruble fell 7.5% against the dollar.

Financial markets are in a “flight to safety and may have to factor in slower growth” due to high energy costs, ING’s Chris Turner and Francesco Pesole said in a report.

In Brussels, the President of the European Commission said Thursday that the European Union of 27 was planning “massive and targeted sanctions” against Russia.

“We will hold President Putin accountable,” said Ursula von der Leyen.

The FTSE 100 in London fell 3.1% to 7,263.75 after Europe woke up to news of explosions in the Ukrainian capital of Kiev, the major city of Kharkiv and other areas. The Frankfurt DAX plunged 4.8% to 13,936.29 and the Paris CAC lost 4.5% to 6,472.93.

The Moscow Stock Exchange briefly suspended trading in all of its markets on Thursday morning. After trading resumed, the ruble-denominated MOEX stock index and the dollar-denominated RTS index both fell by about a third.

Futures on Wall Street’s benchmark S&P 500 index and the Dow Jones Industrial Average fell more than 2%.

That comes on top of Wednesday’s 1.8% plunge for the S&P 500 to an eight-month low after the Kremlin said rebels in eastern Ukraine had requested military assistance. Moscow had sent soldiers to some rebel-held areas after recognizing them as independent.

Putin said Russia needed to protect civilians in eastern Ukraine, a claim Washington predicted it would make to justify an invasion.

President Joe Biden denounced the attack as “unprovoked and unwarranted” and said Moscow would be held accountable, which many took to mean that Washington and its allies would impose additional sanctions. Putin accused them of ignoring Russia’s request to prevent Ukraine from joining NATO and offering security guarantees to Moscow.

Washington, Britain, Japan and the EU have previously imposed sanctions on Russian banks, officials and business leaders. Other options include excluding Russia from the global banking system.

The price of oil on international markets rose above $100 a barrel as benchmark US crude flirted with that level.

West Texas Intermediate climbed from $7.65 to $99.75 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to $92.10 on Wednesday.

Brent crude advanced $8.48 to $105.32 a barrel in London to its highest level since 2014. It lost 20 cents to $94.05 the previous session.

In Asia, the Nikkei 225 in Tokyo fell 1.8% to 25,970.82 and the Hang Seng in Hong Kong fell 3.2% to 22,901.56. The Shanghai Composite Index fell 1.7% to 3,429.96.

Asian economies face lower risks than Europe, but those that need imported oil could be hit by higher prices if Russian supplies are cut off, forecasters said.

Seoul’s Kospi lost 2.6% to 2,648.80 and Sydney’s S&P-ASX 200 fell 3% to 6,990.60.

The Indian Sensex fell 4.7% to 54,529.91. New Zealand lost 3.3% and Southeast Asian markets also fell.

Investors were already worried about the possible impact of the Federal Reserve’s plans to curb inflation by withdrawing ultra-low interest rates and other stimulus measures that have pushed up stock prices.

The dollar weakened to 114.78 yen from 114.98 yen on Wednesday. The euro fell to $1.1161 from $1.1306.

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