Asian shares fell broadly today while the US dollar was able to hold its position firm after a slump on Wall Street and tensions over Ukraine overpowered markets with a risk aversion mood. Upbeat US economic data (due to a surprisingly large increase in factory orders) was overwhelmed by geopolitical concerns.
European shares were expected to open lower today after a sell-off in equities globally was prompted by deterioration in the situation in Ukraine. US and Asian shares extended falls after it was reported that Russian troops were massing at the eastern Ukrainian border. Russian President Vladimir Putin issued orders to prepare retaliatory measures against the latest round of Western sanctions.
“Looking ahead to European trade, we are calling the major European bourses lower as they also play catch up to losses seen around the globe,” Stan Shamu, market strategist at IG, said in a trading note.
“President Putin reportedly ordered his government to investigate retaliatory sanctions against the EU and U.S. There is also renewed build-up of Russian troops at the Ukraine border resulting in fears of Russia invading Ukraine.”
The drag from Wall Street was enough for regional markets and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.4 percent. Since September 2011, German industrial orders posted their biggest monthly fall in June as companies became more cautious about taking out contracts because of geopolitical developments.
The Dow .DJI had already dropped 0.84 percent on Tuesday while the S&P 500 .SPX lost 0.97 percent and the Nasdaq .IXIC lost 0.71 percent. The US dollar hit its highest against a basket of currencies.