Asia markets sink as tensions between Ukraine and Russia climb

Markets across Asia tumbled on Tuesday morning as tensions between Ukraine and Russia continued to escalate.

Japan's benchmark Nikkei 225 (N225) fell 2% in morning trading. Hong Kong's Hang Seng Index (HSI) dropped 2.2%, while Korea's Kospi (KOSPI) lost 1.4%. China's Shanghai Composite (SHCOMP) and Australia's S&P/ASX 200 were both down more than 1%.

The plunge in Asia was preceded by a similar drop for US stock futures earlier on Monday evening local time.

Dow (INDU) futures were down 443 points, or 1.3%. S&P 500 futures were down about 2.2%, while Nasdaq futures were down 3.26%.

Earlier, Russian President Vladimir Putin ordered Russian troops into two separatist pro-Moscow regions in eastern Ukraine after recognizing their independence on Monday. The move to recognize breakaway eastern Ukrainian territories as independent appears to be the opening salvo of a larger potential military operation targeting Ukraine, nearly a dozen US and western officials tell CNN.

"It feels like the situation can dramatically escalate at any moment and that's going to keep investors on edge for now," wrote Craig Erlam, senior market analyst at Oanda, in a research note on Tuesday. "We may well be on the brink of something terrible happening and that's continuing to feed into the negativity in the markets," he added.

The uncertainty was further reflected by a spike in oil prices. US crude futures jumped 3.5% to trade at $94.24 per barrel. Brent crude rose 2.2% to $97.42 per barrel.

A summit between US President Biden and Russian President Vladimir Putin is unlikely, a senior administration official told reporters, following intelligence and indications on the ground that Russia is likely to take military action in neighboring Ukraine.

Markets were closed in the United States on Monday due to the Presidents Day holiday. Last Friday, the Dow closed down nearly 233 points, or 0.7%. The S&P 500 and Nasdaq Composite ended the day with losses of 0.7% and 1.2%, respectively. All three indexes finished last week in the red for the second straight week.

(CNN)