Asian shares extend losses as oil prices push higher

The surge in the price of oil past $130 per barrel was triggered by the possibility the U.S. might bar crude imports from Russia

Shares fell in Asia on March 8 after Wall Street logged its biggest drop in more than a year as markets were jolted by another surge in oil prices. Benchmarks declined in Tokyo, Sydney, Hong Kong, Seoul and Shanghai following a 3% tumble for the S&P 500.

The surge in the price of oil past $130 per barrel on Monday was triggered by the possibility the U.S. might bar crude imports from Russia. Oil prices steadied later in the day and were moderately higher early Tuesday. A third round of peace talks between Ukraine and Russia failed to produce major results. A top Ukrainian official said there was minor, unspecified progress toward establishing safe corridors to allow civilians to escape the fighting.

But Russian forces continued their shelling as food, water and medicine grew increasingly scarce in Ukraine. Surging prices for oil and other vital commodities are rattling global markets and the situation remains uncertain as investors search for safe havens from expanding sanctions against Russia.

Analysts expect the war in Ukraine to top the agenda for some time to come and say the full impact of the conflict is yet to be fully taken into account. “Disruptions to energy markets and the possibility of a geopolitical paradigm shift make for a highly unpredictable environment," Stephen Innes of SPI Asset Management said in a commentary. However, he added, “we should reach a point at which equities start to price in a light at the end of the tunnel."

Japan's benchmark Nikkei 225 shed 1.7% in afternoon trading to 24,783.70. Australia's S&/ASX 200 sank 0.8% to 6,980.30. South Korea's Kospi slipped 0.8% to 2,631.49. Hong Kong's Hang Seng lost 0.5% to 20,956.39, while the Shanghai Composite fell 1.2% to 3,333.49.

On Monday on Wall Street, the S&P 500 fell 122.78 points to 4,201.09. The Dow Jones Industrial Average fell 2.4% to 32,817.38. The tech-heavy Nasdaq composite slid 3.6% to 12,830.96 and is now 20.1% below its record set in November. That means the index is in what Wall Street calls a bear market. The S&P 500 is down 12.4% from the peak it set in early January.

Gold — a measure of nervousness on Wall Street — also rose, though not by quite as much as when oil prices hit their peak. The price of gold briefly touched $2,007.50 per ounce. By Tuesday afternoon, it was at $1,995.88, down 0.1 %.