Global shares under pressure as diplomatic tensions rise on Crimea

Sun Mar 16, 2014 7:22pm EDT
 
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TOKYO (Reuters) - Asian shares got off to a shaky start on Monday after citizens of Crimea overwhelmingly voted to break with Ukraine to join Russia, prompting the U.S. and the European Union to issue fresh warnings of imminent sanctions against Moscow.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was off 0.2 percent in early trade after slumping 2.9 percent last week, its biggest in more than six months.

The tense backdrop pulled U.S. stock futures down 0.5 percent to the lowest in three weeks while Japan's Nikkei .N225 was also expected to fall further from a one-month low hit on Friday.

"The markets were expecting the Crimean to agree to join Russia. So that alone is unlikely to move markets. The focus is on what kind of actions Russia and the West will take next," said Tohru Sasaki, the head of Japan rates and FX research at JPMorgan Chase.

More than 90 percent of Crimeans chose the option of annexation by Moscow in a referendum, which Western powers have denounced as a sham.

U.S. President Barack Obama Russian said Washington rejected the results of a referendum, warning that the United States was ready to impose sanctions on Moscow.

Tension between Russia and the West over Ukraine have hit share markets in recent weeks and boosted traditional safe-haven assets.

Gold, which rose 3 percent last week, traded at $1,385.41 per ounce, just under a six-month high of $1,387.90 hit on Friday.

The Japanese yen also traded near the top of its range in the past month and a half, with the dollar fetching 101.41 yen, not far from this year's low around 100.80 yen.   Continued...

 
Pedestrians walk past an electronic board showing various stock prices, which are reflected in a polished stone surface, outside a brokerage in Tokyo January 24, 2014. REUTERS/Yuya Shino