Gulf News - Russia-Ukraine conflict: Asian stocks in meltdown after fire at nuclear power plant

Dubai: Asian stock markets have taken a deep dive on Friday morning as global investors took in the risks from the fire that broke out at a nuclear power plant in Ukraine. Japan’s Nikkei and Hong Kong’s Hang Seng are in the red by about 700 and 600 points, respectively, while for India’s Sensex the pain cuts even deeper with an 800-point drop in the early trading.

The latest drop for the Sensex and investors turning risk averse could delay the much-anticipated IPO from LIC (Life Insurance Corp.), the Indian insurance behemoth. In recent days, market chatter has veered towards delaying the offering, which is scheduled to open March 11.

“The LIC IPO is to set the platform for further divestments/dilutions of Indian government stakes in public sector enterprises,” said a trader. “With the Russia-Ukraine conflict, the IPO may become a sideshow. Better to delay.”

Positive, yet slow trades

The Dubai and Abu Dhabi stock markets could also feel some of the pressure sweeping Asian markets. In recent days, the UAE stock markets have been relatively flat, with investors buoyed by the oil’s rise and the prospect of upcoming mega-IPOs from DEWA and Salik.

However, trading has been relatively thin during the week, which, according to Vijay Valecha, of Century Financial, is a sign of risk aversion by investors. “We are seeing mixed market moves on the DFM and the ADX owing to geopolitical tensions and rising oil prices,” said Valecha, who is Chief Investment Officer. “The UAE markets are not showing the weakness that is being seen globally. “However, there is a definite reduction in volumes on the market, which is suggesting a much reduced risk appetite from investors.”

Awaiting DEWA

Some analysts say the thin trades on DFM suggest investors are awaiting some announcements on the DEWA IPO. “There is heavy interest for what will be Dubai’s first listing of a major government-owned enterprise,” said the analyst. “Recent days have seen some decent profit bookings and investors are preserving their cash for DEWA.”