Asian markets 'brush off' worries about Crimea

People in Lenin Square, Ukraine Many Crimeans loyal to Kiev boycotted the referendum, and the EU and US condemned it as illegal

Asian shares had a mixed trading session on Monday, with the vote in Crimea backing a union with Russia failing to have a major impact.

Japan's benchmark Nikkei 225 closed down 0.35% at 14,277.67.

Hong Kong's Hang Seng index fell 0.3% while, the Shanghai Composite Index closed up nearly 1%.

"The market has almost entirely brushed [Crimea] off because it was expected," said Invast Financial Services's Peter Esho.

Market Data

Last Updated at 22:12 ET

Market index Current value Trend Variation % variation
Nikkei 225 15601.67 Up 15.47 0.10%
ASX All Ords 5650.30 Up 16.30 0.29%
Hang Seng 24994.10 Up 114.07 0.46%
SSE Composite 2230.46 Down -9.75 -0.44%
SSE SE 50 1587.03 Down -13.31 -0.83%
BSE Sensex 26360.11 Up 45.82 0.17%

Global markets fell last week as investors worried about the Ukraine crisis and China's economy.

Some 95.5% of voters in Crimea - a region of Ukraine near the Black Sea - have supported joining Russia, officials say, after half the votes have been counted in a disputed vote.

Both the European Union and the US have condemned the referendum as illegal and many Crimeans loyal to Kiev boycotted the vote.

Crimea's leader has said he will apply to join Russia on Monday. Russia's Vladimir Putin has said he will respect the Crimean people's wishes.

Start Quote

There are reports of huge flights of capital outside of the United States by Russian nationals back into Russia in anticipation of sanctions going through”

End Quote Peter Esho Invast Financial Services
Capital flight

The outcome has prompted the US and the EU the to issue fresh warnings of possible sanctions against Moscow.

While the fallout was relatively minimal in Asia on Monday, Mr Esho warned that talk of sanctions imposed against Moscow could see further reaction in the markets.

"There are reports of huge flights of capital outside of the United States by Russian nationals back into Russia in anticipation of sanctions going through," he said.

"And what we have seen in recent history is that that has the ability to cause imbalances in certain markets."

Mr Esho said his firm would be tracking gold prices "very carefully" as well as oil.

"We'll [also] be watching pockets of investment where some Russian capital outside the United States might find a home," he said.

China's yuan

Another factor that could affect markets this week is China's decision to double the yuan's daily trading band against the US dollar to 2%.

Essentially, it will allow China's currency valuation to be affected more by market demands.

The move, which was announced over the weekend by the People's Bank of China, has been welcomed by the US and signals China's intent to become more flexible with its exchange rate in the future.

It is part of an ongoing process whereby the Chinese are allowing their currency to become more freely traded on the market.

Yuan and US dollar China's move to widen the trading band of the yuan signals greater flexibility on its exchange rate

"It's a process that is slower than what some had expected, but it's part of a well-thought out process," said Mr Esho.

"The last thing that China wants to see from an artificially inflated currency is high inflation.

"They've allowed their currency to appreciate, but they want to make sure that it's conducted in an orderly way, so this is all part of that process," he said.

The US and China have regularly disputed the value of the yuan, which is also known as the renminbi.

Investors will also be keeping their eye on the outcome of the US Federal Reserve's policy meeting on Tuesday and Wednesday. It will be the first under new Fed chair Janet Yellen and could see a further reduction in US stimulus efforts.

More on This Story

Related Stories

From other news sites

* May require registration or subscription

More Business stories

RSS

Features

From BBC Capital

Programmes

  • A bird of prey in a Tokyo animal cafeThe Travel Show Watch

    From cats to rabbits and birds of prey – Tokyo’s flourishing animal cafe scene

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.