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Putin moves in ‘peacekeepers’ into Eastern e

The incipient rally seen yesterday has been snuffed out overnight after President Putin pushed back on US summit hopes and then recognised the two breakaway areas of the e and began "security" operations there. That dose of reality in dealing with the n President saw European stocks slump and with US markets closed, US index futures tumbled. Dow futures fell by 1.40%, S&P 500 futures by 1.80%, and Nasdaq futures by 2.50%, or thereabouts.

Despite the US holiday affecting liquidity, I believe the result would have been the same anyway and the selloff continues in Asia today with US index futures around 0.40% lower. Japan's Nikkei 225 has slumped by 2.0% this morning, with the South Korean Kospi falling by 1.45%.

China markets are also under pressure, compounded by ongoing tech clampdown rumours and property sector rollover risk this week. The Shanghai Composite is down 1.25% with the more tech-centric CSI 300 tumbling by 1.60% and the Hang Seng slumping 2.30% into the red.

Singapore has eased by 0.75% with Taipei falling by 1.35%, while Kuala Lumpur is down by 0.85%. Jakarta is a relative outperformer, down just 0.20% today, while Bangkok has retreated by 1.55% and Manila by 0.75%.  Australia's ASX 200 and All Ordinaries are 1.25% lower.

With geopolitics subsuming data this week, it is hard to construct a bullish case for equities in the days ahead. European markets are likely to take more fright at the  "security operations" in Eastern e and fall once again this afternoon. Meanwhile, the threat of sanctions and an oil price that is screaming USD 100 a barrel will also keep US equity markets on the back foot.