Asian markets fell and oil prices rose Thursday on growing fears of a war in eastern Europe after Moscow said separatists had called for help to repel Ukrainian forces and Vladimir Putin announced a "military operation."
US officials had warned of an imminent incursion by Russia after the Kremlin this week recognised two breakaway regions in Ukraine and said it would provide "peacekeepers."
Russian President Putin is said to have around 200,000 soldiers amassed on the border with Ukraine, borders and Washington said many are in attack positions.
World leaders continue to work for a de-escalation but have so far failed, while Ukrainian President Volodymyr Zelensky said he had tried to call Putin but there was "no answer, only silence."
He added that Russia could start "a major war in Europe" in the coming days.
And the UN was told a full-scale Russian invasion would have a devastating global impact that would likely spark a new "refugee crisis".
The threat of a conflagration has sent markets spiralling, with traders fretting over supplies of key commodities including wheat and metals.
Crucially, oil has soared to within spitting distance of $100, and both main contracts were up more than 1% on Thursday.
"Russia/Ukraine tensions bring both a possible demand shock (for Europe), and more importantly a much larger supply shock for the rest of the world
given the importance of Russia and Ukraine to energy, hard commodities and soft commodities," said National Australia Bank's Tapas Strickland.
The crisis comes as governments struggle to contain runaway inflation fuelled by demand as life returns after recent lockdowns, with many fearing the fragile global economic recovery from the pandemic could be knocked off course.
After staging a slight bounce Wednesday in reaction to what were considered light sanctions against Moscow, Asian markets were back in the red after a hefty drop on Wall Street.
Hong Kong, Tokyo, Shanghai, Seoul, Sydney, Singapore, Taipei, Jakarta and Wellington all fell.
The stand-off in Europe has provided central banks with a further headache as they move to remove pandemic-era financial support and tighten monetary policy.
Attention is on every utterance from Federal Reserve officials as they prepare to hike interest rates next month, with speculation over how fast and hard it will move.
Commentators said bets are on six increases this year, down from previous forecasts for up to seven, and they said the stakes are rising further. "Policy mistakes at this point in time are almost guaranteed," Shana Sissel of Banrion Capital Management told Bloomberg Television.
"The question isn't, is there going to be a policy mistake, but how bad will it be? Will the Fed hike too much too fast, will they front-load everything?"
And with uncertainty, reigning supreme, warnings abound of worse to come, with BNY Mellon Investment Management's Lale Akoner saying: "Expect volatility to really persist in the next few months."
Geopolitical risks were flaring at a "very inopportune time," she added, as traders try to navigate central bank tightening.
Key figures around 0230 GMT
Tokyo - Nikkei 225: DOWN 1.1% at 26,161.46
Hong Kong - Hang Seng Index: DOWN 1.6% at 23,2929.10
Shanghai - Composite: DOWN 0.2% at 3,483.22
West Texas Intermediate: UP 1.2% at $93.24 per barrel
Brent North Sea crude: UP 1.1% at $97.93 per barrel
Euro/dollar: DOWN at $1.1290 from $1.1308 late Wednesday
Pound/dollar: DOWN at $1.3536 from $1.3545
Euro/pound: UP at 83.42 pence from 83.41 pence
Dollar/yen: UP at 115.08 yen from 114.96 yen
New York - Dow: DOWN 1.4% at 33,131.76 (close)
London - FTSE 100: UP 0.1% at 7,498.18 (close)