Tokyo: Shares sink most in 5 weeks as oil surges on Ukraine war concerns

[TOKYO] Japan's Nikkei share average plunged the most in more than 5 weeks on Monday (Mar 7), as the Russia-Ukraine war showed no signs of abating, pushing up oil and other commodity prices and stoking fears of a stagflationary shock to the global economy.

The Nikkei lost 2.94 per cent to end at 25,221.41, its biggest drop since Jan 27. Earlier in the session, it hit its lowest since November 2020 at 25,006.26, near the psychological level of 25,0000.

The energy sub-sector bucked the trend, rising 4.81 per cent as worries that Russian oil supplies would soon be choked off sent crude prices sharply higher.

Utilities also eked out a small gain. Consumer cyclicals slumped the most, down 5.05 per cent, while tech slid 2.89 per cent.

The broader Topix dropped 2.76 per cent.

"The market is being driven by what looks like a spreading panic," said a trader at a domestic securities firm.

"Until we see how the US stock market reacts, we won't know if it'll prove temporary or persist." US S&P 500 emini futures pointed to a 1.36 per cent drop at the reopen, after the Wall Street benchmark lost 0.79 per cent on Friday.

Russian President Vladimir Putin has vowed to press ahead with Ukraine's invasion, which Russia calls a "special operation", unless Kyiv surrenders, despite severe Western sanctions and widespread international condemnation.

Japan's chipmaking giants slumped, with Tokyo Electron plunging 4.87 per cent, becoming the Nikkei's biggest drag.

Advantest tumbled 5.58 per cent and Renesas dropped 6.18 per cent.

Panasonic dropped 5.17 per cent, and startup investor SoftBank Group slid 5.16 per cent.

Auto stocks also fell, led by truck maker Hino, hitting daily lower limit of 16.76 per cent after admitting to tampering with emissions data. Parent Toyota Motor sank 6.53 per cent.

Fellow truck maker Isuzu lost 9.13 per cent. Suzuki plunged 8.67 per cent, Nissan retreated 6.37 per cent and Mazda declined 7.89 per cent.

Honda fell 3.2 per cent, after its announcement of a joint venture with Sony to make electric vehicles. Sony slipped 2.42 per cent. REUTERS