The Dow Jones Industrial Average dropped more than 2%, putting the blue-chip gauge into correction territory, as surging oil prices deepened concerns about economic growth.

The selloff in equities also put the Nasdaq Composite Index in a bear market, defined as a 20% decline from a recent high. The moves during the start of 2022 had already sent the S&P 500 into correction territory, defined as a decline of at least 10% from a recent high. The Dow industrials joined the other indexes in correction territory Monday as the climb in oil prices threatened to feed into higher inflation.

The Dow industrials were down 2.4% following four consecutive weeks of losses. They are down at about 11% from their January high. The S&P 500 dropped nearly 3%, bringing its 2022 decline to almost 12%. The tech-heavy Nasdaq Composite Index lost 3.6% and is down 18% year-to-date and more than 20% from its high. The S&P 500 entered a correction on Feb. 22, while the Nasdaq Composite fell into correction on Jan. 19.

Attention focused on energy markets, where oil prices rose after Secretary of State Antony Blinken said Sunday that the U.S. and European partners are discussing a ban on imports of Russian oil.

"The market's on increasingly shaky ground," said Hans Olsen, chief investment officer at Fiduciary Trust. "When you combine the price shocks that we're seeing in the energy complex on one hand and the galloping inflation that we're dealing with on the other hand, that's a really tough mix for an equity market to hold valuations where we are right now."

Japanese stocks were broadly lower in morning trade, dragged down by sharp falls in airline and auto stocks as concerns persisted over the war in Ukraine, as well as the higher costs of crude and other commodities. Investors are focusing on headlines about Ukraine, oil and commodities prices after Ukrainian and Russian negotiators ended a third round of talks Monday with little progress. The Nikkei Stock Average was down 0.9% at 24987.31, falling below the 25000 mark for the first time since November 2020.

South Korea's Kospi fell 0.7% to 2632.83 in early trade, tracking Wall Street's declines overnight on surging oil prices and concerns about economic growth. Airlines, whose earnings are vulnerable to higher jet fuel costs, were leading the Kospi's retreat. The possible U.S.-led ban on imports of Russian oil to punish Russia's invasion of Ukraine was weighing on sentiment. Foreign investors remained net sellers of local equities. USD/KRW was 0.4% higher at 1,232.00 on risk aversion.

Hong Kong's Hang Seng Index edged 0.2% higher to 21094.77 on possible bargain-hunting. Exchange data show that mainland China investors are ramping up to purchase more stocks in Hong Kong, DailyFX.com said. This suggests they are taking the recent plunge in stock prices as an opportunity to accumulate more, DailyFX.com added. The Hang Seng TECH Index fell 0.5% to 4502.88 after swinging between losses and gains at the opening.

Chinese shares fell after volatile early trading, with the Shanghai and Shenzhen indexes flitting between positive and negative territories. Risk-off sentiment due to the continuing Russian invasion of Ukraine could limit market liquidity, IG said. "The [Ukraine] conflict may continue to drive market participants to refrain from taking on more risks in the meantime, leading to some wait-and-see." Shares of refining companies fell, as high oil prices exert cost pressures. The Shanghai Composite Index dropped 0.4% to 3357.61, the Shenzhen Composite Index declined 0.8% to 2185.12 and the ChiNext Price Index retreated 0.3% to 2623.34.

Most Asian currencies strengthened against USD as risk appetite rebounded somewhat amid mild gains in U.S. stock futures. China's emphasis on economic recovery should help to stabilize fundamentals for many Southeast Asian countries in coming quarters, MUFG Bank said. However, trade/current-account balances of Singapore and Thailand are more vulnerable to commodity-price increases and Russia-Ukraine conflict uncertainties, compared with Malaysia and Indonesia, MUFG Bank said, adding IDR and MYR may be better supported in the near term, compared with SGD and THB vulnerability. USD/SGD edged 0.1% lower to 1.3616 and USD/CNH was down 0.2% at 6.3144, while AUD/USD rose 0.3% to 0.7340.

Gold declined in early Asian trade amid profit-taking, even as prices of the precious metal edged closer toward the record $2,028.00/ounce set in August 2020. "There is still a lot of optimism that growth prospects won't crumble completely and that helped trigger some profit-taking," Oanda said, expecting gold prices to form a trading range around the $2,000/ounce level. However, "too much uncertainty with commodity prices and economic growth prospects should keep gold prices supported until investors become optimistic that a negotiated end of the [Ukraine] war is in sight," Oanda added. Spot gold dropped 0.2% to $1,992.54/ounce.

Oil prices fell in early Asian trade, coming under pressure after Germany said it had no plans to halt Russian energy imports, according to Simpson Spence Young Futures. The brokerage says the supply outlook looks uncertain after Libya reported that oil output has been affected by damage to pipelines that has resulted in production falling to 920,000 barrels/day from 1.2 million barrels/day. This comes after the U.S. earlier said it was exploring options to limit Russian exports of oil, although no formal decision has been reached yet, SSY said. Front-month Brent fell 0.3% to $122.83/bbl, while front-month WTI dropped 0.5% to $118.75/bbl.

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