At the close of trade, the benchmark S&P/ASX 200 was down 72.30 points – or one per cent – to 7161.30 points.
Experts believe market jitters come on the back of a decision by Russia to recognise two Ukrainian breakaway regions as independent, a move that has heightened already fraught tensions.
Among the biggest losses felt on the local bourse today was payment provider ZIP Co (down 9.71 per cent), Flight Centre Travel Group (down 5.39 per cent) and AMP (down 4.39 per cent).
Of the few companies who gained in today’s trade, Lendlease Group (up 4.46 per cent), Coles Group (up 3.17 per cent) and Woolworths Group (up 2.06 per cent) all finished in the green.
Pre-market data for Wall Street shows heavy losses anticipated as soon as trade starts in the US.
According to Jeffrey Halley, Senior Market Analyst of Asia Pacific at OANDA, a full-scale invasion of Ukraine will see oil prices rise.
“Indeed, a full-scale invasion of Ukraine by Russia will leave many central banks with itchy hiking trigger fingers in a quandary. The immediate impact would be an exacerbation of the rampant inflationary pressures globally as oil hits $130-plus a barrel,” Mr Halley predicts.
“But the inevitable slump by equity markets and high-yield bond markets, just as credit is tightening around the world will probably have them, along with the Fed, hitting the pause button on tightening, and even perhaps unwinding forward guidance.
“Volatility will continue to be the winner, as will the US dollar and gold, and global stagflation could be the fait accompli for some time to come.”
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