MUMBAI, India - Worries over Russian troops amassing near the Ukraine border caused a sharp sell-off in global stock markets on Wednesday.
Germany's DAX dropped 1.4 percent to 9,064.55 and the FTSE 100 in London shed 1.1 percent to 6,611.92. France's CAC was down 1.1 percent to 4,187.23. U.S. markets looked set for another day of losses. Dow futures were down 0.2 percent to 16,340 and S&P 5000 futures slipped 0.1 percent to 1,911.70.
Japan's Nikkei 225 fell 1.1 percent to 15,159.79 and the Hang Seng in Hong Kong lost 0.3 percent to 24,584.13. The Kospi in Seoul shed 0.3 percent to 2,060.73 and China's Shanghai Composite gave up 0.1 percent to 2,217.46. Markets in Southeast Asia, Australia and India also lost ground.
Global markets dropped after news reports of a buildup of Russian troops on the Ukraine border. On Wednesday, Poland's prime minister said he has information indicating that there is a growing threat of a "direct intervention" by Russia in Ukraine. The developments come after the most recent round of sanctions imposed on Russia by the U.S. and Europe. Russia has reportedly called for a meeting of the U.N. Security Council.
Evan Lucas, market strategist at IG in Melbourne, Australia said if Russia increases its presence in eastern Ukraine, then "buyers of all things risk will disappear fast as this is an undefinable event with an undefinable outcome for markets." Energy stocks in particular have been hard hit and this will be the industry to "watch over the next few days as more information flows out of Europe around Russian military positioning."
Benchmark U.S. crude for September delivery was up 17 cents to $97.55 in electronic trading on the New York Mercantile Exchange. With winter a few months away, Europe's recovering economy remains dependent on Russian natural gas for heat and electricity. Germany imports nearly all its natural gas from Russia, and France also gets a significant amount of its energy needs from Russia. "Europe's economy is far more exposed to Russia than the U.S.," said Randy Frederick, a managing director at Charles Schwab.
The dollar fell to 102.39 Japanese yen from 102.61 late Tuesday. The euro dipped to $1.3364 from $1.3371.