Stocks Fall, Oil Tops $110 a Barrel as Ukraine War Rages

BEIJING (AP) -- Global stock markets slid Wednesday and oil prices surged more than $7 per barrel as Russian forces stepped up attacks on Ukrainian cities.

Frankfurt, Shanghai, Tokyo and Paris declined as President Vladimir Putin's invasion fed fears of global economic turmoil. London opened higher.

The war is adding to worries about global economic growth as the Federal Reserve and other central banks gear up to fight surging inflation by raising interest rates.

"The conspiracy of geopolitical uncertainty and stagflation-type impulses is a brutal shock," Tan Boon Heng of Mizuho Bank said in a report.

Investors were waiting for more clues about possible rate hikes when Fed Chair Jerome Powell speaks Wednesday before Congress.

In early trading, the DAX in Frankfurt fell 1.4% to 13,715.13 and the CAC 40 in Paris sank 1.2% to 6,322.17. The FTSE 100 in London gained 0.2% to 7,346.15.

Russia's central bank said stock trading on the Moscow exchange would remain closed Wednesday for a third day, though trading of currencies and precious metals would resume for the first time this week.

The value of Russia's ruble fell further to less than 0.9 U.S. cents despite its central bank's decision Monday to raise interest rates to defend the currency.

On Wall Street, the future for the benchmark S&P 500 index was up less than 0.1%. That for the Dow Jones Industrial Average was up 0.2%.

Oil prices rose despite an agreement by the United States and other major governments in the International Energy Agency to release 60 million barrels from strategic reserves to stabilize supply.

Benchmark U.S. crude jumped another $7.94 to $111.35 per barrel in electronic trading on the New York Mercantile Exchange. It rose $7.69 on Tuesday to $103.41.

Brent crude, the international price standard, gained $7.84 to $112.87 per barrel in London. It soared $7 the previous session to $104.97.

"Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized," said Tan of Mizuho. "Russia pumps more than that in just six days."

Late Tuesday, President Joe Biden announced he was joining U.S. allies in closing the country's air space to Russian aircraft.

In an annual State of the Union speech, Biden said he would try to cushion Americans against the impact of higher oil prices. "I will use every tool at our disposal to protect American businesses and consumers," Biden said.

On Wall Street, the Dow Jones Industrial Average lost 1.8% on Tuesday. The Nasdaq composite slid 1.6%.

In Asia, the Nikkei 225 in Tokyo lost 1.7% to 26,393.03 and the Shanghai Composite Index shed 0.1% to 3,484.19. India's Sensex gave up 2.1%.

The Hang Seng in Hong Kong sank 1.9% to 22,334.14. In Seoul, the Kospi gained 0.5% to 2,712.97.

Sydney's S&P-ASX 200 added 0.3% to 7,116.70 after government data showed Australia's economy grew by 3.4% in the final three months of 2021 over the previous quarter and consumer spending was strong.

Economists say Asian economies are less exposed to the war than Europe but those that need imported oil will be hit by rising global prices, adding to inflationary pressures and depressing business and consumer activity.

Moscow's attack on Ukraine and Russian threats of retaliation in response to Western sanctions also have roiled global markets for wheat and other commodities.

Russia is the No. 2 global crude exporter, behind Saudi Arabia. Any potential disruption in supply could boost prices and add to persistent inflation pressures around the world.

Prices of wheat, of which both Russia and Ukraine are important exporters, have risen more than 20% over one month ago.

Investors shifted money into the safe haven of government bonds, pushing up their market price and narrowing the yield, or the difference between the current price and the payout at maturity.

The yield on the 10-year Treasury was steady at 1.73% after falling Tuesday by an unusually wide margin from Monday's 1.83%.

The dollar gained to 115.18 yen from Tuesday's 114.86 yen. The euro declined to $1.1093 from $1.1123.