Hong Kong (CNN Business)Asian markets and US stock futures plunged on Thursday as Russian President Vladimir Putin announced a military operation in the Donbas region of Ukraine.
Hong Kong’s Hang Seng Index (HSI) declined 3.2%. Korea’s Kospi dropped 2.7%. Japan’s Nikkei 225 (N225) lost 2.4% after coming back from a holiday. China’s Shanghai Composite moved 0.9% lower.
US stocks futures also tumbled. Dow futures were down as much as 780 points, or 2.4%. S&P 500 and Nasdaq futures were down 2.3% and 2.8% respectively.
The broad losses followed a sharp decline on Wall Street on Wednesday. The Dow closed down more than 464 points, or 1.4%, posting its fifth straight day of losses. The S&P 500 and Nasdaq fell 1.8% and 2.6%, respectively.
The market turbulence comes as CNN teams in Ukraine reported explosions. Putin announced a military operation in the Donbas region of eastern Ukraine early Thursday local time.
In the address, broadcast on Russian national television, Putin urged Ukrainian forces to lay down their arms and go home, saying all responsibility for possible bloodshed will be entirely on the conscience of the Ukrainian government.
Putin’s speech came as concerns mounted of an imminent full-scale Russian invasion. Ukrainian President Volodymyr Zelensky said in an emotional speech early Thursday that the Russian leadership had approved military action in Ukraine and vowed the country would defend itself.
“Geopolitical risks remain at the forefront, weighing on risk assets as heightened uncertainty over Ukraine continue to keep market participants on edge,” wrote Yeap Jun Rong, a market strategist for IG Group, in a note on Thursday.
He added that Putin is probably “willing to weather the economic impact of sanctions, which may bring into question on what the Western powers can do to hold off an invasion.”
Brent crude, the world benchmark, briefly climbed above $100 a barrel for the first time since 2014. US crude jumped 3.3% to $95.15 a barrel.
Chinese tech stocks ignore state media call
Meanwhile, Chinese tech shares fell on Thursday despite state media seeking to reassure investors over regulation concerns.
On Friday, Chinese authorities released a set of new rules to help the services sector recover from the pandemic, and directed online delivery platforms to cut service fees or commissions they charge businesses.
The announcement sparked fears about a renewed tech crackdown and hammered tech shares this week. Online food delivery platform Meituan has plunged more than 20% since Friday.
The state-run Economic Daily tried to play down the fears on Wednesday.
The market has “over-reacted” to the government’s guidance that food delivery platforms should cut service fees they charge businesses, the state-run Economic Daily said in an editorial, adding that the policy’s aim is to not target the internet economy but to support the service sector in the post-pandemic recovery process.
“The guidance has more than 5,000 words, with only a few lines concerning the platform economy,” the paper said.
But tech investors are still nervous. Meituan was down 2.4%. Tencent, which has a major stake in Meituan, tumbled 3%. Alibaba, which owns food-delivery platform Ele.me, sank more than 6%.
Alibaba is scheduled to reveal its quarterly earnings later Thursday.
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