Wall Street pointed toward some slight gains when markets opened Friday after Western governments promised new sanctions on Russia, which threatened to make Europe pay for natural gas exports in rubles to prop up the crumbling currency.
Futures for the benchmark Dow Jones Industrial Average rose 0.3 per cent while the same for the S&P 500 index gained 0.4 per cent. Shares in Asia mostly finished down while European markets were up at midday.
Western leaders meeting Thursday in Brussels promised more sanctions that US President Joe Biden said were meant to “increase the pain” on Russian President Vladimir Putin, but no details of possible new penalties were released.
Putin threatened to require European customers that rely on Russia gas supplies to pay in rubles. That would increase demand for the Russian currency, pushing up an exchange rate that has slumped under sanctions.
European leaders, on Thursday, rejected that possibility, potentially setting up a clash over energy supplies.
Putin’s demand is a “cunning gambit” to frustrate sanctions while “elevating uncertainty for the West,” said Tan Boon Heng of Mizuho Bank in a report.
London and Shanghai declined while Tokyo gained and Frankfurt was little-changed. Oil fell but stayed above US$110 per barrel.
In midday trading, the FTSE 100 in London rose 0.3 per cent, the DAX in Frankfurt climbed 1 per cent, and the CAC in Paris jumped 0.9 per cent.
In Asia, the Shanghai Composite Index lost 1.2 per cent to 3,212.24 while the Nikkei 225 in Tokyo gained 0.1 per cent to 28,149.84. The Hang Seng in Hong Kong fell 2.5 per cent to 21,404.88.
The Kospi in Seoul was little-changed at 2,729.98 while Sydney’s S&P-ASX 200 gained 0.3 per cent to 7,406.20.
India’s Sensex lost 0.8 per cent to 57,152.53. New Zealand, Singapore and Bangkok advanced while Jakarta declined.
Russia’s February 24 invasion of Ukraine sparked investor unease about the impact on prices of oil, gas, wheat and other commodities. Russia is the second-biggest crude exporter, and both Moscow and Ukraine are major wheat suppliers.
Markets already were on edge about plans by the US Federal Reserve and other central banks to fight surging inflation by rolling back ultra-low interest rates and other stimulus that is pushing up stock prices.
Oil prices are up more than 50 per cent in 2022 because of worries about inflation and possible supply disruptions.
Benchmark US crude lost US$2.12 to US$110.22 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell US$2.59 on Thursday to US$112.34. Brent crude, the price basis for international oils, sank US$1.79 to US$113.51 per barrel in London. It lost US$2.57 the previous session to US$119.03 a barrel.
The dollar declined to 121.67 yen from Thursday’s 122.26 yen. The euro gained to US$1.1012, from US$1.0997.