Asian Shares Decline As Putin Announces Partial Military Mobilization

asian market down 21sep22 lt

Asian stocks closed mostly lower on Wednesday after Russian President Vladimir Putin announced a partial military mobilization in the country, bringing geopolitical tensions to the forefront.

In a televised address, Putin said the partial mobilization of its 2 million-strong military reserves is needed to defend Russian territories, claiming the West wants to destroy Russia and does not want peace in Ukraine.

Worries about aggressive Federal Reserve policy tightening also kept investors on their toes ahead of the central bank's highly anticipated interest rate decision later in the day.

China's Shanghai Composite Index slipped 0.2 percent to 3,117.18 as the Asian Development Bank cut its economic growth forecast for China and also lowered its outlook for developing Asia, citing the Ukraine conflict, Beijing's Covid Zero policy and central banks' efforts to combat inflation. Hong Kong's Hang Seng Index tumbled 1.8 percent to 18,444.62 on Fed jitters.

Japanese shares hit a two-month low as caution prevailed ahead of the Fed, Bank of Japan and Bank of England meetings.

The Nikkei 225 Index closed 1.4 percent lower at 27,313.13, marking its lowest closing level since July 19. The broader Topix slumped 1.4 percent to 1,920.80, its weakest close since September 7.

Air conditioner manufacturer Daikin Industries led losses to close down nearly 4 percent, while Japan Steel Works soared 4.1 percent despite the company lowering its profit forecast for the current fiscal year.

Seoul stocks fell ahead of a widely expected hefty rate hike from the U.S. Federal Reserve. The Kospi dropped 0.9 percent to 2,347.21. Samsung SDI, Naver and Kakao all lost around 2 percent.

Shipbuilder Daewoo Shipbuilding & Marine Engineering surged 8.9 percent amid heightened anticipation that the company's privatization would gather steam down the road.

Australian markets tumbled to hit a two-month low, with commodity-related stocks pacing the declines on fears of a global recession.

The benchmark S&P/ASX 200 Index gave up 1.6 percent to end at 6,700.20, falling for the third time in four sessions. The broader All Ordinaries Index dove 1.5 percent to 6,921.40.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 Index slid 0.6 percent to settle at 11,498.95.

U.S. stocks fell sharply overnight, as Treasury yields surged to multi-year highs as caution gripped markets ahead of the Fed's rate hike announcement.

Ford's warning of big problems with supply chains and input costs also raised concerns about the earnings outlook.

The Dow and the tech-heavy Nasdaq Composite both shed around 1 percent, while the S&P 500 slumped 1.1 percent.

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