Shares are likely to open lower after US stocks fell for a fifth session and exit polls showed Crimean voters voted to secede from Ukraine.
The March SPI 200 futures contract dropped 18 points or nearly 0.4% to 5307 as Wall Street wrapped up its worst week since January with minor falls on Friday.
The S&P 500 briefly regained the 1,850 support area before fading to 1,841, a loss of five points or 0.29% for the session and 2% for the week. The Dow gave up 43 points or 0.27% for a weekly loss of 2,4%. The Nasdaq lost 15 points or 0.36% for a 2.1% weekly fall.
"Sentiment is all over the place because of the uncertainty from the outcome in Crimea over the weekend," Colin Cieszynski, senior market analyst at CMC Markets in the US, told MarketWatch. "However, markets are using geopolitical uncertainty as an excuse to go lower as they are overly stretched and are due for a correction."
Exit polls quoted by Russian news agencies showed voters in the Crimea overwhelmingly supported leaving Ukraine to rejoin Russia. Around 93% voted in favour of secession in a poll held overnight that was branded by the US and European Union as "illegal" and "illegitimate". The result raises the stakes in the worst stand-off between Russia and the west since the Cold War. Read more here.
Another weak round of weather-affected US economic news failed to encourage risk appetite on Friday. Consumer sentiment fell to a four-month low and wholesale prices retreated for the first time in three months. The UMich/Reuters sentiment gauge came in at 79.9 this month from a final February reading of 81.6. Economists had anticipated a reading of 80.8.
Concerns over deteriorating Chinese economic momentum also affected trade as a succession of economists reduced their growth forecasts. Read more here.
Australia's biggest miners finished mixed after iron ore fell for the first time in four sessions. BHP slipped 0.34%, while Rio Tinto gained 1.01%. Spot iron ore for import to China fell $1.40 on Friday to US$110.10 a dry tonne.
Copper rallied from a 44-month low amid speculation that Chinese authorities will introduce stimulus measures to support the economy. US copper for March delivery rallied 0.6% or around two cents to US$2.94 a pound. In London, copper gained 0.8%. Nickel fell 0.3%. Aluminium and zinc also fell, tin was flat and lead rose.
Gold stocks in the US continued to advance as the metal locked in a fifth day of gains. The Gold Bugs index put on 0.52% as gold for April delivery rose $6.60 or 0.5% to US$1,379 an ounce.
Oil cut its loss for the week to 4%. West Texas Intermediate Crude oil for April delivery improved 69 cents or 0.7% to US$98.89 a barrel.
European stocks declined for a third session in jittery action ahead of the Crimean vote. The Stoxx Europe 600 index dropped 0.7% as Germany's DAX added 0.42%, France's CAC lost 0.81% and Britain's FTSE fell 0.39%.
TRADING THEMES THIS WEEK
UKRAINIAN FALL-OUT: The people of the Crimea spoke overnight and western governments will not welcome what they had to say. The outcome is likely to be an increase in sabre-rattling this week and heightened geopolitical tensions - good for gold and other havens, broadly negative for risk assets, including equities.
VOLATILITY: Overnight-hold strategies have become less reliable this year with the return of violent overnight gyrations on world markets. On Friday the US's Volatility Index jumped nearly 10% for a weekly rise of 30% and its highest close since February 5, implying an increasing possibility of further downside this month. Index put/call ratios in the US also became increasingly bearish last week.
YELLEN'S FIRST FED MEET: A possible highlight this week is the first policy statement from the Federal Reserve since Janet Yellen replaced Ben Bernanke as chairman. The board of governors sits from Tuesday to Wednesday and is due to release the statement on Wednesday. Other US economic data due this week is likely to get a free pass from traders due to the impact of tough winter weather.
ECONOMIC NEWS: A light week for domestic data includes: new motor vehicle sales (11.30am EST today); minutes from the last RBA policy meeting (tomorrow); leading index (Wed); and RBA Bulletin (Thu). A solid week ahead in the US includes: industrial production (tonight); consumer price index/core CPI, housing starts (tomorrow); weekly jobless claims, existing home sales and Philly Fed (Thu).
