Asia markets fall as Ukraine crisis intensifies; Bank of Korea holds interest rates steady

SINGAPORE — Asia-Pacific shares fell on Thursday as investors continue to watch the escalating situation between Russia and Ukraine.

The Shanghai composite in mainland China fell 0.32% and the Shenzhen component dropped 0.4%. Hong Kong's Hang Seng index was down 1.3%.

In Japan, the Nikkei 225 declined by 0.73%, while the Topix slid by 0.5%.

South Korea's Kospi was down 1.6%. The Bank of Korea kept interest rates unchanged at 1.25% at its meeting on Thursday. However, it predicted that consumer price inflation will run "substantially above 3% for a considerable time."

Australia's S&P/ASX 200 fell 2.78%. MSCI's broadest index of Asia-Pacific shares outside Japan traded 1.62% lower.

On the earnings front, Alibaba will be reporting its third-quarter earnings late in Asia.

Concerns over the escalating tensions in Russia and Ukraine remain in focus.

U.S. Secretary of State Antony Blinken said Wednesday evening that Russian forces could engage in a full invasion of Ukraine before the night is over.

Ukraine on Wednesday announced that it intends to impose a state of emergency for 30 days with the possibility of an extension. The measure must first be approved by parliament. The country also warned its citizens to leave Russia and avoid traveling there.

Oil prices rose on Wednesday after reversing earlier losses. U.S. crude futures rose 1.24% to trade at $93.24 per barrel early in Asia on Thursday. The international benchmark Brent crude futures climbed by 1.13% to $97.93 per barrel.

The crisis entered a new phase this week when Russian President Vladimir Putin said Moscow would formally recognize the independence of two pro-Moscow breakaway regions in eastern Ukraine.

On Wednesday, Russian state-controlled media reported that Moscow had started evacuating people from its embassy in Kyiv, Ukraine's capital.

Overnight on Wall Street, the three major indexes continued to fall. The S&P 500 fell 1.8% and slid deeper into correction, while the Dow Jones Industrial Average dropped 1.38% to 33,131.76. The technology-focused Nasdaq Composite lost 2.6% to 13,037.49.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.327, up from 96.190.

The Japanese yen traded at 114.95 per dollar, while the Australian dollar was at $0.7207 after falling from $0.7233.