Asian stocks and currencies were battered on Thursday with shares in Thailand losing almost 1.6% and Singapore shares dropping 2% as the Russian attacks on Ukraine spoiled investors appetite for risk.
Russian forces fired missiles at several Ukrainian cities and landed troops on its south coast on Thursday, officials and media said, after President Vladimir Putin authorised what he called a special military operation in the east.
The Moscow Exchange said on Thursday morning it had suspended trading on all markets while the rouble fell to a record low.
The Stock Exchange of Thailand plunged 27.01 points, or 1.59%, to 1,699.44 in the morning trade.
Thailand also reported a record number of new Covid-19 infections on Thursday, dragging shares down by up to 1.7% at one point, its biggest percentage drop since Dec 20.
Kasikornbank shares led the loss, dropping five baht, or 2.97%, to 163.50 baht, Commercial Bank plunged 4 baht, or 3.09%, to 125.50 baht, and Bangkok Bank dropped 2.50 baht, or 1.75%, to 140.50 baht.
Singapore shares slumped up to 2.9% for the third straight session, logging their sharpest drop since May 14, while Indian shares weakened for a seventh consecutive session, falling 3% to a two-month low.
Singapore was dragged lower by a 3% slump in its financial stocks. Philippines and South Korean shares also weakened by 2.2% and 2.8% respectively.
"The escalation is likely to send EM inflation higher in coming months, we think, mainly by pushing up commodity prices. Higher commodity prices are likely to affect big net importers such as Thailand and India," Sid Mathur, head of emerging markets research for APAC, BNP Paribas.
"For EM currencies, we expect the negative impact on risk sentiment to outweigh any positive commodity price impact," he added.
The conflict in Ukraine helped drive safe-haven bids for the greenback, while gold prices rose by over 2% to their highest since January last year.
"Risk-off sentiment overall is rising, and we expect it to grow further if Russia makes further inroads into Ukraine, led primarily by the result of higher energy prices. Overall, we expect markets to remain volatile in the near term," an OCBC note said.
Brent oil surged to US$100 a barrel for the first time since 2014.
The dollar's strength and rocketing oil prices hurt emerging market currencies, with the commodity-linked Indian rupee leading declines, easing 0.8% while the baht was down 0.5%.
South Korea's won was also down 0.8%, its sharpest decline since Dec 20, while Philippines peso fell 0.6%.
South Korean stocks opened steeply lower Thursday, tracking overnight plunges on Wall Street that stemmed from rising tensions in Ukraine.
