Australian shares have plunged by 3 per cent after Russian President Vladimir Putin launched an invasion of Ukraine.
Russian troops landed in the Ukrainian Black Sea port of Odessa and in Mariupol in the eastern Ukrainian region of Donetsk, Russian news agencies reported.
Several explosions were heard in the Ukrainian capital, Kyiv, before dawn, after an initial series of sounds similar to artillery fire, a Reuters witness reported, shortly after Russia announced the military operation.
Mr Putin called on Ukrainian soldiers to immediately lay down their weapons and go home, and said the responsibility for any bloodshed will be on the conscience "of the Ukrainian regime" according to comments carried by Russian news agencies.
The comments worsened an already grim sell-off in Australian trade, pushing the ASX 200 down 3 per cent to 6,991, making its worst one-day fall since September 4, 2020.
All sectors were in the red, with industrials and mining leading the losses.
The All Ordinaries index was also down 3 per cent to 7,253 points.
Miners dropped to their lowest since earlier this month, as iron ore prices slumped on concerns regarding demand in China amid a directive for ports to reduce their stockpiles of the commodity.
Sector heavyweights BHP (-6.9pc), Rio Tinto (-3.8pc) and Fortescue Metals (-4.2pc) all fell steeply.
Tech stocks dropped 6.4 per cent to hit their lowest level since June 2020.
Tech company Life360 was the biggest loser on the benchmark index, plunging 28.8 per cent to $4.68 after revealing its loss had doubled.
Appen slumped 28.7 per cent to $6.11 following its profit report.
Payments and buy now pay later companies including Block (-13pc), Zip (-10.3pc) and Tyro (-7pc) also got slammed.
Qantas fell 5.1 per cent after it posted a bigger-than-expected half-year loss and forecast a $650 million hit to second-half earnings before interest and tax due to Omicron.
However, CIMIC jumped by 33.4 per cent to $22 after the news about a takeover bid from Hochtief.
Gold miners were the only sector gaining ground, led by Perseus Mining (+12.3pc), Ramelius Resources (+4.7pc) and Evolution Mining (+4.8pc).
Next DC (+3.4pc) and Nine Entertainment (+1.1pc) were among the other rare gainers on a day when most of the market was awash with red.
Brent crude oil rocketed, trading at $US101.2 a barrel, by 4:05pm AEDT.
Spot gold jumped more than 1.8 per cent to $US1,942, its highest level since early January 2021.
The Australian dollar was down slightly at 71.8 US cents this afternoon as the greenback gained.
Tim Harcourt, chief economist from the Institute for Public Policy and Governance (IPPG) at UTS, said the military confrontation in Ukraine could send further "shocks waves" through the world.
"Europe is particularly vulnerable to a supply shock as it is especially reliant on Russian oil and gas," he warned.
"For example, more than 20 per cent of Germany’s gas emanates from Russia, hence why German Chancellor Olaf Scholz made a pretty gutsy call to call a halt to Nord Stream gas pipeline.
"There is also a danger if Australia is targeted by Russia, as it is seen as too close to the rest of the West when imposing the initial sanctions.
Lale Akoner, senior market strategist at BNY Mellon Investment Management, told Bloomberg that geopolitical risks were flaring at a “very inopportune time” since markets are grappling with receding stimulus support.
'Isn't surprising but frustrating': Joyce
Qantas has reported a $456 million net loss in the first half of the 2022 financial year, limited by a major land sale in Mascot, but Delta and Omicron have resulted in even bigger operational losses.
The airline saw an improvement on its net loss, compared to the $1.06 billion loss a year ago.
However, it also reported a steeper $1.28 billion first-half underlying loss during a period hard-hit by domestic and international border closures.
The airline's most closely watched financial measure, the result was bigger than a $1.03 billion loss a year earlier.
However, the company said the outlook was improving as restrictions eased.
"Most of Australia was in lockdown for several months of the first half, so the loss we've announced today isn't surprising but it is frustrating," Qantas CEO Alan Joyce said.
"The uncertainty carried over into January but demand has started to recover as Australia adjusts to truly living with COVID. Our frequent flyer surveys show the intent to travel is extremely high and we're seeing good leisure demand into the fourth quarter.
"We've also seen a sharp uptick in international ticket sales in the past few weeks."
Mr Joyce said the company was on track to deliver more than $900 million in annualised savings through restructuring by the end of the 2022 financial year.
Qantas had to scale back domestic and international capacity plans by around one-third after the Omicron variant of COVID-19 emerged, leading to record case numbers in Australia and lower-than-expected travel demand.
The airline said demand had strengthened in recent weeks, but it forecast a $650 million hit to second-half earnings before interest and tax due to Omicron.
Qantas said it would run 68 per cent of its pre-COVID-19 domestic capacity in the third quarter, rising to 90 per cent to 100 per cent in the fourth quarter.
International capacity would be around 22 per cent of pre-COVID-19 levels in the third quarter, doubling to 44 per cent in the fourth quarter, the airline added.
“Qantas’ results for the first half continue to reflect the impact of Delta-related lockdowns and the emergence of Omicron. Still, the airline’s net debt reduced by $400 million to $5.5 billion, and we expect it to reduce further by fiscal 2022 before trending towards the bottom of its target range of $4.4 billion to $5.5 billion," said Ian Chitterer, vice president of Moody’s Investors Service.
"We expect Qantas' EBITDA and balance sheet recovery over the next 12-18 months to be substantial, given its strong liquidity, increasing capacity, and a lower probability of border closures.
Global stocks slip after Ukraine state of emergency
Wall Street indexes ended sharply lower on Wednesday as Ukraine declared a state of emergency and the US State Department said a Russian invasion of Ukraine remains potentially imminent.
Earlier, the West unveiled more sanctions against Russia over its move into eastern Ukraine, and in what some market watchers saw as another sign of a possible Russian military onslaught, Moscow began evacuating its Kyiv embassy.
Nasdaq led the day's decline, while the information technology sector was the biggest drag on the S&P 500.
"There's been geopolitical risks and rhetoric that have given investors that much more to be worried about," said Liz Young, head of investment strategy at SoFi.
"I don't want to minimise that, but what it's done is exacerbate the momentum that was already in place to the downside.
Investors especially have been on edge about possible aggressive tightening by the US Federal Reserve to combat inflation.
The Nasdaq has tumbled more than 15 per cent so far this year, while the S&P 500 confirmed a correction in the previous session when the index ended down more than 10 per cent from its January 3 closing record high.
The Dow Jones Industrial Average fell 465 points, or 1.4 per cent, to 33,132, barely above the 33,120 level that would have confirmed a correction.
The S&P 500 lost 79 points, or 1.8 per cent, to end at 4,226 and the Nasdaq Composite dropped 344 points, or 2.6 per cent, to 13,037.
The pan-European STOXX 600 index slipped 0.3 per cent, after it firmed 1 per cent in early trading with banks, financial services firms and retailers leading declines.
After rising as much as 0.7 per cent earlier on Wednesday the MSCI World Index, a leading gauge of equity markets globally, reversed course in morning trading and was last down 1 per cent, with losses deepening in afternoon trading.
ABC/Reuters
